Scam Alert: Do you need to buy credit insurance?

In tough times we all worry about paying our bills. But should you take out insurance when you’re buying something big just in case?

The Maryland attorney general’s office wants to make sure you understand what’s happening if you do, because they’re getting complaints.

Pros and Cons
Whether you’re buying a car or home it can be nerve racking, so you might be looking for a safety net with something called credit insurance.

It’ll cover your bills if you die, get hurt or lose your job. But Assistant Attorney General Karen Straughn warns it’s notoriously overpriced and not everybody needs it.

She says some people are getting this kind of insurance and paying for it month after month without even realizing it.

It’s being thrown away by people who may have inadvertently signed on for credit insurance when they signed up for a big loan. It might be sold to you with claims it’s mandatory, but in Maryland that’s often not the case.

Instead Straughn warns this kind of insurance is often buried in the fine print of contracts, especially when you’re buying a car.

Dealerships may not explain it to you and it may add it into your finance agreement.

That’s why you’ve got to make sure you understand the terms before you sign on.

Anyone offering credit insurance should disclose it before you commit, so make sure you find out how long you’ll be paying, how much, and exactly what it covers.