3 Times You Should Definitely Buy the Extra Insurance—and a Few Times to Skip It

Pet Insurance

Buy it. “It’s heartbreaking to watch families have to decide whether or not they can save their pet’s life because of finances,” says Donnell Hansen, DVM, an oral surgeon at BluePearl Veterinary Partners in Blaine, Minnesota. “Insurance gives you extra resources and helps get rid of the guilt.” Most plans pay 70 to 90 percent of the cost of procedures, which is significant when you’re facing $2500 for a fractured tooth or upwards of $6000 for knee surgery.

Before you do anything, research policies using a site like NerdWallet or ConsumersAdvocate.org. Some plans don’t include wellness visits or vaccines, and none cover preexisting conditions, so it’s best to get insurance when your furry friend is a baby, if possible, for lower rates.

Around the House

Renter’s Insurance

Buy it. “A wild party or overflowing sink can cause significant damage to a structure, which can lead to astronomical repair bills that most renters can’t cover out of their own pockets,” says Neil Richardson, a licensed insurance agent at The Zebra, an insurance comparison site. Renter's insurance covers personal items that are stolen or destroyed and, he adds, your liability coverage often includes protection if your dog bites someone or if your housecleaner slips and gets injured.

When purchasing renter's insurance, you have to decide between replacement cost coverage (where your policy pays to replace your item with a new version) and actual cash value (your policy gives you the depreciated cost of the item). “The premium for replacement cost coverage is more expensive, but it will generally cover your items at a higher amount,” explains Richardson.

Appliance Warranty Extensions

Depends on the item. For major appliances you expect to keep for more than 10 years and that cost more than $500—like refrigerators and washing machines—a warranty extension makes sense, says Angie Hicks, cofounder of Angi (formerly Angie's List), a consumer services site.

Skip it for TVs and other electronics whose technology changes so quickly you’d probably end up replacing instead of repairing. “As always, understand what the policy covers, if you still have to pay a service fee, and how the repair will be handled,” says Hicks. She also advises buying the extension from the manufacturer, not the store, adding, “It’s easier to get parts that way.”

HVAC and Utility Maintenance Plans

Buy it. “It’s really important to maintain your furnace and air conditioner, because they lose efficiency otherwise, which will hit you in your utility bill,” says Hicks. Also, as a policyholder, you often pay less for up-front service fees and typically get first priority in the repair queue when your system inevitably goes out on the hottest or coldest day of the year.

Home Warranty

Depends on the terms. A home warranty, which is separate from homeowner insurance, is often offered during closing. The main benefit is that it keeps you from worrying about unexpected and costly repairs. On the other hand, Hicks warns that home warranties come with many restrictions: You don’t have a say as to how a particular item is replaced or repaired, and you’re beholden to the warranty company’s standards, schedule, and service person.

When you file a clam, it's the warranty company that decides if you get a replacement or (more likely) a quick fix that lasts the life of the warranty. The company also chooses the service provider, whose quality of work you might not be happy with, adds Hicks. Before saying yes to a home warranty, ask for a list of service workers, estimated service fees, and the typical timeline for repairs.

When You’re Traveling

Rental Cars

Depends on your other coverage. If your auto insurance policy covers rental car damages, you can skip the extra fee, but Richardson advises you to call your company to find out about specific exclusions. Also, ask your insurer about your exact travel plan (like renting a car in Italy or driving across state lines). “Your regular insurance likely won’t cover everything, and many rental car companies fight for every possible repair,” he says.

Credit cards offer some rental car protection as well so, before you rent, ask your card's company if you're covered only when you pay for the rental with that card, if you can decline the rental company’s insurance entirely, and if the credit card company offers primary rental insurance (meaning you don’t have to file a claim with your own car insurance) or secondary rental insurance (meaning you have to file a claim with your insurance carrier first, which will likely increase your rate).

Travel Insurance

Depends on your prepaid expenses. For any trip that puts a large amount of money at risk, particularly up-front costs (like group packages and booked cruises), travel insurance can be a good idea, says Damian Tysdal, licensed travel insurance agent and founder of Travel Insurance Review. You typically pay between 4 and 8 percent of the trip's total cost upfront so, if you’re planning a $5000 vacation, that extra few hundred dollars can give you peace of mind, medical coverage if you’re in a foreign country, and some protection against certain weather disasters, says Jennifer Fitzgerald, founder and CEO at Policygenius.

Skip it if you booked your trip using a credit card with travel protection or are willing to sacrifice your prepaid expenses, says Richardson. It’s especially not worth it for smaller costs (like concert tickets) or for last-minute domestic trips—airfare can typically be changed for a fee (or free) and most hotel reservations can be canceled at no risk within 48 hours.

When You’re Shopping

Jewelry

Don’t open a new policy. If your piece is worth over $1500, Richardson suggests providing a description and receipt to your homeowner or renter’s insurance company for broader protection against theft and loss.

Cellphone

Depends on your habits, device, and other insurance. Homeowner and rental insurance policies often cover theft or accidental damage by a major disaster (like a fire). Also, your deductible may be higher than the cost of a new phone, and the reimbursement amount may be limited, says Fitzgerald.

“Phones are increasing in reliability, so the bigger concern is if it accidentally breaks,” says Daniel Bader, editor-in-chief of Android Police. Ask yourself, “Am I a perpetual screen shatterer? Do I work around water? Will my kids borrow my device?” If you answer yes to any of these, insurance is probably worth it.

Next, consider how robust your phone, case, and screen protector are. Then do a cost analysis to determine if the extra $10 or so a month adds up to more or less than the price of a phone repair.

If you purchase a plan, go through the manufacturer (if they offer one), not your carrier. Repairs done through your carrier’s insurance plan can take a few weeks, since most carriers don’t have in-house facilities and have less access to inventory.

Extended Car Warranty

Skip it. As with a home warranty, the main benefit is not having to worry about unexpected costs, but car warranties generally don’t cover all repairs, says Richardson, and aren’t transferable if you sell your car within a few years. “Also, you may lose coverage if you don’t do proper maintenance,” he adds. “It’s usually a better deal for the warranty company than you.”

An extended car warranty may make sense if your model is known for needing expensive and extensive repairs. That said, the best insurance of all is not buying that type of car in the first place.