The Never-Buy List

The large-loss principle generates a standing catalog of products to decline, and they share one signature: they insure small, affordable losses at large markups, sold at the point of sale where the friction of saying no is highest.

Extended warranties and phone insurance

Priced at multiples of the expected repair cost; Tier 1 cash is the warranty. The credit card you bought the item with frequently extends the manufacturer’s warranty for free — check the card’s benefits guide, then decline the counter offer.

Flight and travel-cancellation insurance

Trip-cancellation coverage largely duplicates what the booking card already provides, and flight accident insurance is AD&D with worse pricing (section “Accidental Death and Dismemberment (AD&D) Insurance”). The exception worth buying deliberately is medical-evacuation coverage for international travel (section “The Coverages the Standard Stack Misses”), which insures a genuine tail.

Rental-car damage waivers

The counter pitch works because nobody remembers their coverage stack at the counter. Your own auto policy’s collision and liability generally follow you into a rental, and the card used to book typically adds collision-damage coverage — but read both first: card coverage is usually collision-only with no liability, often secondary to your own policy, and commonly excludes exotic vehicles, long rentals, and some countries. Decline the waiver when the stack covers you; buy it only where it genuinely does not, or where a claim’s premium consequences at home would exceed the waiver price.

Wedding, event, and pet insurance

Prepaid maintenance and small-loss cover with the economics of dental insurance (section “Dental Insurance”): the cap is the tail. Fund the vet bill and the deposit risk from Tier 1 cash.

The pattern to internalize: any insurance sold as an add-on at a register, a counter, or a checkout page is priced on inattention. Coverage worth owning is bought deliberately, from the framework at the top of this chapter.