That a comprehensive insurance policy covering all eventualities should be close to the top of everybody's personal finance checklist could never be in doubt.

Whether it be for a soon-to-be-taken holiday, a new car or simply to guard against the unlikely event of a break-in or fire, insurance can not only offering to ease the load on a policyholder's mind but also save them money and stress in the long run and, therefore, the monthly premiums can often represent a bargain.

However, simply signing up to whichever policy comes with a new product or package holiday can be financially damaging in its own right.

In fact, many of the policies on offer are nothing short of a rip-off, claiming to offer 'peace of mind' but in fact being worth little more than the paper they are written on.

According to a new report from the consumer group Which? Britons are collectively wasting millions of pounds each year through failing to read the small print of the various insurance policies they are offered and asking whether such a product is in fact necessary.

For example, the benefits of specific mobile phone insurance are very much in doubt, given that stolen or lost handsets should be covered by a run-of-the-mill home contents policy.

Similarly, contents insurance can often cover any losses overseas, despite what the travel agents say, while standard life insurance policies may contain provisions for accidental death or injury.

Payment protection insurance and identity theft cover should also be viewed with a degree of scepticism, the report concludes.

"The insurance industry’s favourite phrase is 'peace of mind', but it uses this to justify policies that cost a lot and are almost impossible to claim against," explained Tony Levene, author of the new Which? Guide, the Money Saving Handbook.

He explained: "Instead of just blindly following what the salesman says, people should carry out a risk assessment of their own and make an informed choice about whether they actually need the insurance, and whether it's worth the premium."

According to Graeme Trudgill, technical and corporate affairs executive of the British Insurance Brokers' Association (BIBA), consumers need to make more of an effort to research any policies on offer and, if necessary, seek the help of a specialist.

"Don't just go and go and surf the internet and buy the cheapest thing you can find," he has advised.

"Speak to an insurance broker who can give you the right advice on the right policy for you."