If insurance is optional, covering baggage and academic expenses alike.
In the world of insurance, some policies may seem necessary but are often found to be overpriced and offer minimal coverage. Financial experts are urging consumers to be cautious when considering insurance add-ons, with baggage insurance, credit insurance, and tutoring insurance among the policies to avoid.
Baggage insurance, as part of travel insurance, is often criticised for its high cost and insufficient coverage. Travel expert Rick Steves warns that the chances of lost baggage are extremely slim, making baggage insurance generally poor value for money. The German Association of the Insured (VdS) also identifies baggage insurance as one of the insurance offers that are not worth the money.
Credit insurance is another policy that experts advise against due to its high cost and lack of sufficient coverage. Financial experts have highlighted that credit insurance can lead to issues with insurers and does not offer adequate protection.
Tutoring Insurance Plus, offered by Astra Versicherung AG, was awarded the "Insurance Cheese of the Year" in 2024. The policy offers 400 or 600 euros for pedagogical services during a hospital stay, but experts question its necessity, as children's right to education is already fulfilled through hospitals in most cases.
Luggage Insurance contracts often have many exclusions and restrictions, and in case of gross negligence in handling travel luggage, the insurer may only pay a partial or no compensation at all. Similarly, Trip Cancellation Insurance policies can be misleading, as insurers do not ask risk-related questions when applying, leaving the decision on which risk to cover to be made in the event of a claim.
Home contents insurance might provide better protection than Luggage Insurance for valuable items. Consumers are encouraged to carefully evaluate the coverage details and probability of risk before purchasing such add-ons. Transparent and efficient claims processes are critical when assessing whether a policy is worth the cost.
In conclusion, consumers should be wary of insurance policies that are costly yet provide minimal real value or coverage. The "Insurance Cheese of the Year" metaphorically refers to such policies, with baggage insurance, credit insurance, and tutoring insurance being prime examples in the market. By being informed and careful, consumers can make wise decisions and avoid unnecessary expenses.
Personal-finance experts advise avoiding baggage insurance due to its high cost and insufficient coverage, often criticized for being poor value for money. Similarly, credit insurance is another policy that financial experts discourage, highlighting its high cost and lack of adequate protection.
