Whilst insurance can seem expensive, particularly if you don’t need to make a claim, this cost will pale into insignificance if you are faced with a major loss. Many of us simply renew our insurance policies without giving them much thought and this means that we aren’t necessarily getting the best deal. So how do you ensure that you have the right insurance at the right price?
Don’t Buy More Cover Than You Need
Although it can be tempting to insure yourself to the hilt, it probably isn’t necessary. Make sure that the value that you are insuring for reflects the cost of putting yourself back in the same position if you suffer a total loss. With buildings cover this should be the rebuild cost of your home and not the market value. With contents cover this should be how much it would cost to replace your goods on a like-for-like basis.
Think Before Buying Additional Cover
Think about all the extras that are offered to you with your different insurance policies. If you don’t have children or pets and are not keen on DIY then do you really need accidental damage cover? Home and motor policies often offer legal expenses cover. It’s unlikely that you need to buy this more than once. If you’re only holidaying in Europe look at a travel policy that is limited to Europe rather than a worldwide one.
Don’t Under-Insure
It is equally important to make sure that you don’t under-insure. It is a false economy to declare a low value in order to keep your premiums down and get cheap insurance. Not only will it limit the total amount that the policy will pay out in the event of a major loss, but it could also result in any smaller claim that you make being reduced proportionally to reflect the under-insurance.
Improve the Risk
Whilst your premium is based partly on factors that you can’t control, there are some that you can. If you are able to lessen the risk that an insurer will have to pay out your premium will be cheaper. A discount is usually offered, for example, for cars parked off-road at night or in a garage or for homes that have approved locks on doors and windows. If you have medical or life cover then make lifestyle improvements such as stopping smoking to get cheaper premiums.
Shop Around at Renewal Time
Even if you’ve got it right this year, it is important not to get complacent and simply renew your policies next year. Insurance pricing changes frequently and new customers often get bigger discounts than existing ones. Make sure, therefore, that you test the market before renewing. Even if you want to stick with the same insurer, you may be able to use the prices being offered by their competitors as a bargaining tool to bring your premiums down. No one wants to pay too much for insurance. By spending time thinking about the type of cover and how much you need, you can ensure that your premiums don’t cost the earth.