If you’re looking to tighten your belt, you may be eying your various insurance policies and wondering if you’re just throwing money down the drain. The answer is: You might be! There’s insurance you may have too much of, and insurance you don’t have enough of. Here’s how to sort it out:

1. Health insurance is a must-have. Period. Unexpected health costs are the no. 1 cause of personal bankruptcy – if you have an accident, you could be wiped out financially for the rest of your life. Most of the major provisions in the health-care reform bill recently signed into law don’t take effect until 2014, so for now the burden is on you. If you’re not covered through work, and you’re not eligible for coverage through COBRA coverage (a program that lets laid-off workers pay to continue with their former employers), look for a low-cost catastrophic coverage from www.ehealthinsurance.com to tide you over. And check options for insuring children at www.insurekidsnow.gov.
2. You probably don’t have disability insurance – but you should. Disability insurance is also called “income protection” – it provides income if you are injured off the job, a situation for which employers in most states have no legal obligation to support you. More people have life insurance than disability insurance, yet before age 65 you are three times more likely to be disabled for more than 6 months than to die. If you can’t afford to suddenly lose your income for months at a time, then you need disability insurance. Ideally, your policy should pay at least 60%-70% of your income. Key words: Look for non-cancelable, guaranteed renewal plans that offer residual benefits protection (for partial disabilities) and inflation protection (so your benefits don’t shrink over time). Check out the website www.affordableinsuranceprotection.com, which lets you compare policies from many different providers.
3. Not everyone needs life insurance. Life insurance has a simple purpose: It protects the people who depend on your income in case you die. If you’re single without children, or if you’re married but your spouse could support himself without your income, then you probably don’t need it.  If you decide that you do need it, however, term life insurance (as opposed to a “permanent” policy) is often gives you the most coverage for your money, especially for young people. Insurance agents often discourage you from buying term insurance, because their commissions on these policies are lower. But do your research and don’t be swayed. You can compare quotes for term insurance at www.term4sale.com, or for a wider variety of policies at www.insure.com.
4. Look for – and ask for – discounts. For car insurance, you can often get cheaper rates if you have a clean driving record, take a defensive driving class, are a student with good grades, and/or drive a safe car (find safety ratings at www.highwaysafety.org). Home insurance rates can go down if you if you have smoke detectors, doormen, or other amenities that make your home safer. Some companies who provide renters’ insurance offer a discount if you also go to them for car insurance.
5. Beware unnecessary insurance. There are many kinds of insurance you may be tempted to buy on impulse or because it seems cheap. You probably don’t need collision insurance for your rental car, for example: You may be protected by your credit card, and your own car-insurance policy may also cover rentals. You don’t need travel insurance for every trip. Credit life insurance, meant to pay off your existing loans before you die, is overpriced and doesn’t benefit your heirs directly. (Your estate will be responsible for your debts, but your heirs will not; if you’re concerned about this issue, life insurance is a smarter buy.) Bottom line: Investigate before you buy, and don’t buy based on fear.