When buying an insurance policy, there are many factors you need to consider. Some of your questions might be how much insurance do you really need for you to be protected?

There are several types of insurance available to consumers. But it makes you ask a question, whether you really need all of these.

Before buying insurance, you must understand the types of risks you want to avoid, the value, and the amount of excess you will accept.

Extended Warranties

When buying large electronics or home appliances, sales representatives might tell you to purchase an extended warranty.

However, reports saying that you should steer clear of these insurances is rarely worth the price.

A Stanford University study found that consumers may overpay for extended warranty because they overestimate the likelihood that they will need a repair.

"The chance that your refrigerator or dishwasher actually needs a repair during the extended warranty period is pretty low," Dan DiClerico, a home expert with HomeAdvisor.com and a former editor for Consumer Reports, was quoted in a report.

Rental Car Insurance

Rental car agencies usually include four types of coverage, such as liability, personal accident, personal effects, and loss damage waiver, also known as collision damage waiver.

Some coverage offered by rental agencies doubles insurance many consumers already purchased. For instance, your personal auto insurance may already include collision and personal liability coverage, which extends to rental cars.

Group Term Life Insurance

Individual insurance is much more economical and more relevant. Some employers might offer group-term life insurance coverage because some companies may cover the cost.

Also, Haven Life said that group life insurance does not provide enough coverage. The policy can also sometimes fall short if you have a growing family or your life insurance needs change.

Pet Insurance

Around 1.4 million pets in the U.S. and Canada were covered by a pan at the end of 2014. Pet insurance is insurance for your pet.

This would cover your pet in the event of sickness or injuries. However, researchers said that pet insurances are not at all necessary unless your pet's breed is susceptible to expensive ailments.

If that is the case, getting a pet insurance is a wise choice as it will protect your savings in times of it is needed.

Water Line Coverage

Water companies were said to sell policies that cover the repair of the water line that runs from the street to your house. However, odds of needing this are unlikely, especially if you live in a newer home.

Life Insurance for Children

Life insurance is intended to assure your heir or dependents. Applying for life insurance for children might not be needed as children do not have any dependents yet.

Most parents do not need to purchase life insurance for their kids, according to Investopedia. The money to be used for children's life insurance should instead be used to cover their educational expenses.

People's situations vary, and there is no foolproof answer as to what kind of insurance policy you should buy yourself.

However, it pays to be wise in making decisions that include money. Make sure that the type of insurance you want would be used in the long run.

Check these out:

Essential Insurance That Every Business Should Have

Choosing the Life Insurance Policy that Best Meets Your Needs

How to Spot A Rogue Home Insurance Company