Match Insurance Coverage to Real Risks, Not Sales Pitches

Every April, Alex dutifully tallied his bills and stumbled over piles of insurance policies. He had life insurance he didn’t need, credit protection he never used, and two auto plans that overlapped. Feeling frustrated by premiums draining his checking account, he grabbed a cup of tea and tackled the stack.

He listed each policy—the carrier, the premium, the deductible, the coverage limits—on a lined piece of paper. A quick cross-check revealed that his premium rental car insurance duplicated the credit card’s program. He sold the policy. His employer-sponsored life plan covered $200,000; he owned an extra $150,000 private policy that made no logical sense, so he let it lapse.

By trimming the fat, Alex freed up $1,200 a year for his savings account—money that used to vanish automatically. His heart rate slowed as he realized how little he was sacrificing in protection.

Behavioral research on decision-making suggests inertia often drives people to keep paying for services they no longer need. By creating a simple insurance inventory and pruning redundant coverage, you gain clarity and extra cash without jeopardizing safety. It’s a freeing exercise—pay attention, ask questions, and cut any wasteful premiums.

Make a list of every insurance policy you hold, noting premiums and coverage. Then cross-check for overlaps—like credit card rental coverage—and eliminate redundancies. Finally, bump deductibles on home and auto to the max you can cover, and direct the saved premiums into an emergency fund.