Electronics under warranty, pets with pre-existing conditions, your identity, and other things not worth insuring
From life insurance for those without dependents to rip-off identity theft cover, we look at six pointless insurance policies.
Insurance can offer invaluable protection in many cases.
When it comes to driving, it’s a legal requirement and most lenders won’t offer you a mortgage if you don’t have buildings insurance.
Sadly, not all policies are as worthwhile.
In this article, we look at six types of insurance you probably don’t need and suggest alternative ways you can protect yourself.
1. Electronics still under warranty
Whenever we buy a new laptop or TV, it’s common for the salesperson to attempt to push the extended warranty as these are highly profitable for retailers.
In many cases, however, these policies offer little value, especially for the period in which your item is still covered by the retailer’s warranty.
Most warranties will cover repairs or replacements on new items for between 12 months and two years.
The Consumer Rights Act 2015 also states that all goods must last a "reasonable" amount of time.
If a product breaks within six years due to a fault present when it was purchased, you may still be entitled to a repair or replacement.
Many extended warranties also include a long list of exclusions – for example, you may not be covered for accidental damage resulting from spilling liquid on the product.
One more thing to bear in mind: although retailers often tell us that we need to contact the manufacturer directly if there is a fault with an item, this isn’t the case.
When you make a purchase, your contract is with the shop, and it is their responsibility to rectify any issues.
2. Your handbag
Some companies offer specialist handbag insurance, which is often aimed towards those who are a fan of designer ranges.
Before you splash out on a policy, however, it’s a good idea to check whether your bag is already covered on your home contents policy.
If you have a particularly expensive bag, you could consider listing this separately as a high-value item on your insurance.
Additionally, you may be able to include expensive items that you routinely have in your bag, such as your phone.
How to cut the cost of your home insurance
3. Your boiler
A broken boiler can be an absolute nightmare if it leaves you without heating during the colder winter months.
However, this doesn’t mean that taking out specialist insurance cover is a always shrewd financial decision.
According to research last year from consumer champion Which? households with boiler cover forked out an average 76% more (equal to £270) than those who opted for an annual service and paid repair costs themselves.
As well as detecting defects and safety issues, an annual service should help ensure your device is operating efficiently, which can help keep your bills as low as possible.
New boiler cost: how to save thousands when buying and installing a new boiler
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4. Pets with pre-existing conditions
The number of new pet insurance policies reached an all-time high of 4.4 million in 2023, the latest data from the Association of British Insurers (ABI) has found.
Additionally, payments from pet insurance policies also exceeded £1.2 billion for the second consecutive year.
Despite this, many pet insurance policies remain one of the more controversial personal finance products, especially where pre-existing conditions are concerned.
While some providers refuse to cover animals with pre-existing conditions, others specifically exclude these conditions from their coverage.
Common examples of pre-existing conditions exempt from policies include diabetes, arthritis and epilepsy.
Even if you take out a policy, you’ll still need to pay out for any treatment relating to these conditions.
Rather than taking out pet insurance, you may be better off regularly saving into an emergency fund, which could help cover these costs if needed.
5. Your identity
It goes without saying that the stats surrounding identity theft are frightening.
According to data from FICO, approximately 1.9 million Brits had their identity stolen in 2023, with their details used to fraudulently open financial accounts.
In this environment, it’s unsurprising that an entire industry has sprung up claiming to offer protection against this type of crime.
The reality is that identity theft insurance often offers little value, especially as there are other sources of help available to victims.
For example, all credit card companies should automatically offer identity theft protection.
Likewise, credit referencing services such as Experian allow you to monitor your credit file for free, which can help you to identify any suspicious activity.
6. Your life (for some people)
A payout for a life insurance policy can help replace your lost income and cover major expenses should you pass away, such as paying off a joint mortgage or contributing to university costs.
However, not everyone has these expenses.
Take an honest look at your circumstances and ask yourself whether anyone would lose out financially after your death.
For example, you may no longer need cover if your children are now adults and financially stable.
If you’re concerned about meeting your funeral costs, you may want to consider paying into a high-interest savings account to cover these expenses, rather than taking out life insurance.
Life insurance: 11 reasons you might need MORE cover
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