Essential insurance: what you really need and what you can skip

Most people are either over-insured or under-insured. Rarely the right amount.

You probably have a phone insurance you've never claimed, a travel insurance you bought years ago, and maybe a life insurance policy your bank "offered" when you took out your mortgage. But do you have health insurance? Do you have life insurance if you have children?

The problem isn't having insurance. It's having the wrong ones — and missing the right ones.

The core principle — before any product talk

There's a simple rule that clarifies everything: insure what you cannot financially replace.

If your phone breaks and you lose €800, it hurts — but it won't destroy your financial stability. If you have a serious accident and can't work for 3 months, or you die leaving dependent children, the financial impact is devastating.

That's what insurance is for. Not to protect objects. To protect your financial capacity when something truly serious happens.

The 4 genuinely essential types of insurance

1. Health insurance

Public healthcare systems are a valuable right. But anyone who has waited months for a specialist appointment knows their limitations. Private health insurance doesn't have to be expensive — there are options in most European countries between €15 and €50 per month covering specialist consultations, tests, and minor procedures.

For a family, health insurance is probably the best value insurance you can have.

2. Life insurance (if you have dependents)

If nobody depends on you financially — no children, no partner without their own income, no parents you support — life insurance may be unnecessary.

But if people depend on your salary to live, life insurance is irreplaceable. It covers: income your family would lose if you died, mortgage repayment, children's education.

3. Home insurance

If you have a mortgage, it's typically required by law. But even without one, it protects your home against fire, flooding, and structural damage. Your home is probably your most valuable asset — it makes sense to protect it.

4. Car insurance

Third-party liability is legally mandatory almost everywhere. For older cars with low market value, basic third-party may be enough. For cars worth over €10,000–15,000 or with active financing, comprehensive cover makes financial sense.

Insurance you can skip (or reduce)

Phone insurance

Typically costs €8–15 per month — €100–180 per year. If your phone costs €600, in 3–4 years you've paid the equivalent of the device's value in premiums. And policies are usually full of exclusions — screen damage, loss, theft under specific circumstances — making claims rare and complicated.

Alternative: save those €10–15 per month in a dedicated fund for equipment replacement.

Extended warranties on appliances

Rarely worth what they cost. Most appliances don't break during the extended warranty period. And when they do, repair costs are often less than the sum of monthly payments made.

Travel insurance for short EU trips

The European Health Insurance Card (EHIC) covers medical emergencies across the EU. For short trips to EU countries, additional travel insurance may be redundant — especially if your private health insurance already has international coverage.

How to choose insurance without overspending

Never accept the first quote. Compare at least 3 insurers. Price comparison sites make this easy in most countries.

Review your insurance once a year. Your circumstances change — what was essential at 25 may not be at 40, and vice versa.

And remember the core rule: if you can absorb the financial loss without destroying your stability, you don't need insurance. If you can't — insure it.