The Insurance You Actually Need Versus the Insurance You Are Sold

Insurance companies make money by selling you coverage for things that are unlikely to happen or cheap to replace. Extended warranties on electronics, flight delay insurance, pet dental plans — these exist because they are profitable for the insurer, not because they protect you. The purpose of insurance is to protect against catastrophic losses you cannot absorb, not minor inconveniences you can.

Health insurance, liability coverage, and property insurance for your home or car — these are worth it because a single event without them could bankrupt you. Everything else, ask yourself: could I cover this cost out of pocket if it happened? If yes, you probably do not need a policy for it. Save the premium money and build your own buffer instead.