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The consumer watchdog group maintains that insurance such as life insurance, car, contents and building insurance were vital plans to have. But believe that cover for things such as, cover ID theft, extended warranties, and payment protection plans were expensive and unnecessary.

The group advises consumers to avoid taking out extended warranties, identity theft cover, payment protection insurance (PPI), mobile phone cover and accidental death and injury cover. This advice for many would sound rather strange as the incidents mentioned above do occur and it would make sense to take out the following plans. However what the insurers fail to point out is that many people were paying insurance for something they were already protected for by their existing policies.

For example, under the Code of Bankers, individuals who all prey to ID theft should automatically be reimbursed by their bank or building society. The consumer group also argues that accidental death and injury cover is often included under life insurance, yet insurer group’s still sells accidental death and injury cover separately. The same principle applies to mobile phone insurance, as that is also a pointless cover to have as it is covered under content insurance.

The payment protection insurance scheme has been a long running controversial issue. The purpose of the PPI is to cover the repayments on loans, mortgages and credit cards if the borrower is unable to make them due to a result of accident, sickness or unemployment. However it has faced huge criticism for being expensive and offering very limited benefits to its policy holders. It is sad because many people take up the policy because the selling point is to offer peace of mind. Claiming peace of mind is a key selling point as many people desire to have peace of mind and it is unfair for insurers to manipulate consumers with unnecessary policies. As Tony Levine author of the Which Money Saving Handbook said:

"The insurance industry's favourite phrase is "peace of mind", but it uses this to justify policies that cost a lot and are almost impossible to claim against," He also said: "Instead of just blindly following what the salesman says, people should carry out a risk assessment of their own, and make an informed choice about whether they actually need the insurance, and whether it's worth the premium,"

The FSA (Financial Services Authority) is beginning to clamp down on these polices as they had recently fined HFC Bank, which is part of the HSBC group, £1m for failing to ensure that 163,000 of its consumers were properly advised when they bought the company's PPI. policy. This was one of the ninth banks that have been imposed fines by the FSA for failing to advice their customers correctly on the purchase of PPI policies.

Also The Financial Ombudsman Service (FOS) has also seen a sharp increase in PPI complaints. This is because they claimed to have received over five thousand complaints in this financial year so far. This is a huge increase as compared to last year they received two thousand complaints.

The Association of British Insurers (ABI) response to the discussion of unnecessary insurance polices was that it is up to consumers to make sure they do not waste money on unnecessary cover. The director of the Association Nick Starling says that: "It is important that people look into their individual circumstances to ensure they have adequate insurance for their needs, particularly for life changing events such as unemployment and ill-health," "The sale of insurance is regulated but consumers should also be asking questions so that they can decide if a product is right for them."

The best advice when it comes to purchasing insurance policies is to make sure you are aware of what the insurance actually covers what you really need and it is important that the consumer takes these precautions in order to make an informed decision on which insurance policy to sign up to. Fazila has more articles covering insurance

1. Comparison Shop

Insurance rates can vary by hundreds of dollars from one insurer to the next. Spending a few minutes comparing rates between insurers, then choosing the cheapest one, can save you hundreds of dollars a year. Visit an insurance comparison website to compare rates from multiple insurers on one site. (See link below.)

2. Increase Your Deductible

Your deductible is the amount of money you have to pay toward a claim before your insurer pays. By raising your deductible from $250 to $1,000 can save you up to 50%.

3. Drop Your Collision and Comprehensive Coverage

If you drive and older car that's worth less than $2,000, you'll probably pay more for your collision and comprehensive coverage than you'l collect on a claim.

4. Consolidate Your Policies

By placing your homeowners, renters, and auto insurance policies with the same company you can get up to a 15% discount.

5. Get a Safety Discount

Most insurance companies will give you a discount if you have safety features like airbags and anti-lock brakes on your car.

6. Get a Security Discount

Insurers give discounts if you have security features such as car alarms an anti-theft devices installed on your car.

7. Get All the Discounts You Can

Insurance companies offer discounts for a variety of reasons like being accident-free for three years, being over 50, taking a driver's education course, and having a good credit rating. Ask your insurer to give you all the discounts you qualify for.

Visit http://www.LowerRateQuotes.com or click on the following link to get auto insurance rate quotes from top-rated companies and see how much you can save. You can get more tips and advice in their Articles section, and get answers to your questions from an insurance expert by using their online chat service.

The author, Brian Stevens, is a former insurance agent and financial consultant who has written a number of articles on auto insurance.