Reply To: Inset a face except for the bottom bit

There are several ways to do this, depending on the result you want.

you could extrude 3 Edges like this:

and then press I (Inset), B (Boundary):

Then remove unnecessary geometry.

This gives you an Edge loop around the ‘insetted’ rectangle. 

Sometimes you want this and other times you will want the loop cuts like you made, it depends on the situation.