Insurance policies to avoid: No need to cover your kids, your cruise or your clunker

When it comes to insurance, people often think that it's better to be safe than sorry, but often wind up spending more money than they should on coverage they don't need.

Besides wasting money, consumers sometimes don't buy enough coverage that they do need – and don't realize it until a disaster such as a flood occurs. Consumers also pay too much in premiums by keeping their deductibles low, even though they could afford the out-of-pocket expense if they filed a claim.

"The basic rule of insurance is to cover your big risks in life, and those would include your life, your health and your home and your car if you have one," said Greg Daugherty, executive editor of Consumer Reports, in an interview. "You can insure just about anything that you want."

People can take simple steps to save money on insurance, such as shopping around for the best deal. Companies also give discounts to customers who buy more than one type of coverage from them. The key thing for consumers to do is to make sure that they have coverage that's both comprehensive and geared toward covering catastrophic events that would cause economic hardship, such as the death of a spouse.

But the more exotic types of insurance are probably not a good idea for most people because their coverage isn't comprehensive and does not include situations that are catastrophic enough to cause severe economic hardship, according to Robert Hunter, director of insurance for the Consumer Federation of America. Here are a few of the more common types of insurance that Hunter and other experts believe people should avoid: