Avoid these common insurance mistakes
When it comes to any kind of insurance, it's important to get the amount of cover just right: too much and you're paying more than you have to; too little, and your policy won't pay out when you need it.
To cut the confusion surrounding many types of insurance - and try to help consumers get the most appropriate amount of protection - the Association of British Insurers (ABI) has published a list of the most useful tips and the most commonly believed myths about car, home, life and travel cover.
How much cover?
The ABI has highlighted a few issues about the amount of cover consumers should sign up for when they take out home and car insurance.
With buildings cover - which insures your property against structural damage such as subsidence or flooding - the amount of cover you need to take out is the home's rebuild value, rather than the amount you'd get if you sold it.
In most cases, the rebuild value is rather less than the market price, largely due to the fact that land values have not risen as quickly as house prices.
Keep your policy updated
The ABI also reminded homeowners that any improvements to their properties such as conservatories or loft extensions should be reflected in higher buildings insurance cover.
And any new consumer goods such as TVs and computers should be added to contents policies if necessary - either by increasing the amount of total cover, or insuring them separately if they are especially valuable. Most policies have a value limit, above which items have to be named individually in order to be covered.
Don't forget depreciation
Equally, with car insurance you only need to be insured for what your car is worth - with depreciation taken into account - rather than what you paid for it. After all, if it is written off, your insurer will not pay out any more than its market value.
Make sure you don't insure your car for too much when you renew your policy: the amount should fall every year.
A policy for life
On the other hand, says the ABI, life insurance premiums are based on your health when you take the policy out, so you should not expect to pay more, or see your cover reduced, as a result of ill health further down the line.
Bring your travel cover up to scratch
Holidaymakers in Europe should not rely solely on the European Health Insurance Card (EHIC) to meet all their needs.
The EHIC gives UK residents the right to free health service treatment in other EU countries: but as the ABI warns, this will not necessarily be the same level as the NHS, and other expenses such as repatriation costs are not included.
A travel insurance policy offers much more peace of mind, and can cover non-medical problems such as cancelled flights or hotel-room thefts.
About the Author
Use Confused.com's simple, safe and speedy website to find great deals on car insurance. Fill in one form and within minutes you could make big savings on your motor insurance - 10% of confused.com car insurance customers saved over £188.
Rating: Not yet rated