Being insured is important for people in many situations. It just feels good to be covered “just in case” and to have protection. We also like to spend (a lot) money on this – more than 2000 euros per person per year. Unfortunately, often for the wrong insurance, because not everything and every scenario is really worth being insured. Some insurance companies could take a closer look at consumers and see whether they really make sense for them. We have selected a few insurance examples:
The training insurance
Many parents just mean well with their offspring and want them to be protected as well as possible. Taking out training insurance quickly comes into focus. But behind the term is nothing other than a capital life insurance, in which you pay a certain sum monthly so that the child has a larger amount of money available for education.
In order to make optimal use of training insurance, parents would actually have to take out this when their child is born, because only then would the period be sufficient to save an effective sum. The catch with training insurance is that it consists of a mix of endowment and term life insurance and the returns in this area have been extremely low for years, while the costs of training insurance are often high. The consumer advice center in Hamburg therefore advises: “It is cheaper to separate investments and insurance – that is, to save money for education and to protect the children by taking out term life insurance.”
The warranty extension
Just as popular – especially in times of online shopping – is taking out a warranty extension when purchasing an electrical appliance such as a TV, kitchen appliance or washing machine. The arguments are always the same: save repair costs, for example due to wear and tear, aging or material defects in the device.
Ultimately, it is a follow-up insurance that should take effect when the statutory warranty period of two years for electrical appliances has expired. “Here, too, there are numerous exclusions and only the current value is replaced. It is often not worth taking out an insurance ”, so the assessment of the Bavarian Ministry of Consumer Protection.
The luggage insurance
Even if it is currently only possible to travel to a limited extent due to Corona: Those who book a vacation trip are often confronted with luggage insurance. In many cases, you can save the money; you don’t need such insurance. If, for example, the luggage is lost on a flight, the airline is usually liable. On the other hand, if luggage is stolen from a locked hotel room, the hotel’s insurance or even your own household insurance may be liable.
In addition, most luggage insurances have high security requirements and, according to the Hamburg Consumer Center, “insured persons often assume in the event of damage that they did not take care of their luggage”.
The mobile phone insurance
Mobile phone insurance is also often taken out in Germany, because this is often automatically offered by the seller when buying a device – similar to a television. Accordingly, hardly any consumer makes an insurance comparison.
According to experts, quite a few device insurances are too expensive and also contain many exclusions. The theft protection for smartphones often only applies to burglary and robbery, which cannot take place between 6 a.m. and 10 p.m., according to the Bavarian Ministry of Consumer Protection on its website.
The residual debt insurance
In most cases, anyone who takes out a loan is asked whether they would like to take out residual debt insurance. The argument: In the event of incapacity for work, unemployment or death of the borrower, this insurance should then compensate for the loan debt.
Sounds logical at first glance, but the costs of payment protection insurance, including credit insurance, are usually high and they are simply added to the loan amount, so that the loan amount increases. This in turn allows the APR and thus the monthly loan installment to climb up. Quite a few experts see residual debt insurance as an additional business for banks. According to consumer advocates, numerous restrictions also ensure that insurers rarely have to pay. “It is therefore more sensible to take out term life insurance with a sufficiently high coverage”, advise the experts at the Hamburg Consumer Center, as this would allow relatives to service the loan if the borrower died prematurely.
Weighing up the risks and making a comparison is worthwhile
At the end of the day, before taking out insurance, every consumer should take the time to think about the risks involved, how they fare financially in the event of damage, to what extent this could even endanger their existence and whether a policy is even necessary as a result.
Ultimately, a broken cell phone or a stolen suitcase is annoying, but it does not necessarily require the conclusion of (expensive) insurance. Anyone who is unsure about one or the other insurance, such as an occupant accident, death benefit or glass insurance, should take the opportunity to contact the consumer advice centers of the individual federal states and get advice. In the end, it’s also about money that can be saved with unnecessary policies.
–
