Insurance policies can be extremely helpful – but only if you take out the most necessary ones for your own circumstances. Everyone is different and there is no one-rule-fits-all solution. There are certain insurances that are essential and you would be extremely foolish not to have.

For example, you always should have house insurance. You home is far too valuable an asset to lose so if it were to burn to the ground or get flooded out then you need insurance to pay out the loss. So what are the types of insurance where you are literary better off keeping your money in your pocket?

1. Mortgage Payment Protection Insurance 
Mortgage payment protection insurance (MPPI) is a type of insurance where you make an additional monthly payment that covers you if you unable to make your monthly mortgage payments – maybe due to an unexpected health problem or loss of income. Typical charges per $1000 per month mortgage payment are around $50 a month. But according to recent figures only 15% of claims are paid out. This is because MPPI typically excludes pre-existing conditions as well as new conditions if they are stress or back related. But even if you do make a claim on this type of insurance – it will only pay out for a year and this is only after an ‘excess’ period of between 30 and 60 days.

2. Payment Protection Insurance 
When you are taking out a loan, credit card or any other kind of finance you will usually be asked if you want payment protection insurance. This covers the payments if you lost your job, fell ill or had an accident. These policies should be avoided due to the fact they are notorious for not paying and are in fact not necessary most of the time. Why not put aside some of your own money every month to cover any possible eventuality.

3. Cell Phone Insurance 
Signing up to cell phone insurance is also rarely worthwhile. A policy can add another $10 to $20 on to your monthly bill and should cover you if you lose your phone or its gets stolen as well as any fraudulent calls made, However, a replacement handset can be purchased inexpensively – compared to the monthly payments. It could also be covered by your house insurance anyway.

4. Extended Warranties 
When you make a purchase for an electrical home appliance such as TV, fridge or washing machine you will usually be offered an extended warranty by the sales staff. They will push this as they obviously get commission on selling it to you. This type of warranty generally extends the manufacturer’s standard year warranty for a further 3 or 5 years, for example. But recent tests have shown that modern appliances are unlikely to break down in the first few years after purchase. If you are really concerned about an extended warranty then you can buy one from elsewhere and not necessary where you bought the item from The manufacturer’s themselves often offer a more comprehensive cover.