For many people, the cost of living is biting hard. This means that they literally cannot afford any nasty surprises. Having the right insurance cover is a key source of protection against this. With that in mind, here are some tips on how to get the right cover at the right price and maximise your chances of having any claim accepted.
Work out what you need to cover
If you have a car, then you need third-party insurance. It can be worth getting fully-comprehensive. The price difference between this and third-party only can be smaller than you’d think. After this, your priorities are usually your life, your house, your health and medical bills and legal bills.
Your life and your house are fairly obvious. They may not apply to everyone. For example, life insurance only applies to people with dependents. With that said, dependents can be more than just children. It could mean broader family, friends or even pets.
Likewise, health and medical bills can relate to pets as well as people. They can also relate to making sure you have an income if you become unable to work through accident or illness. For example, you may want or need Payment Protection Insurance, Income Protection Insurance and/or Critical Illness Cover.
Having insurance for legal bills can help to protect you from having to settle unreasonable claims against you because you cannot afford to fight them. This may seem excessive but it is an issue even at the best of times. Right now, many people are likely to have a particular incentive to be aggressively litigious. Again pet owners should be particularly cautious here as should cyclists.
You should also look to cover anything essential to your everyday life, health and/or wellbeing. For example, if you rely on your bicycle to get to work, then you probably ought to insure it.
Work out who you need to cover
It can be worth covering non-income-earners (e.g. home-makers) and even children as well as income-earning adults. Non-income-earners are generally contributing to the home in some other way. For example, they often have caring responsibilities.
This means that, effectively, they cushion the family from potentially crippling expenses (e.g. childcare). If they become unable to carry out their usual tasks, then somebody else will need to step in. Family and friends may be able to help out for a short period but probably not for a long one. Realistically, however, even for short periods, it can be reassuring to know you can afford professional help.
Children may not contribute financially to the family. Again, however, if they become ill, it can become expensive for their family. For example, parents may need to take time off work and incur extra expenses such as hospital parking. This means that having at least some level of insurance cover can be a wise precaution.
Getting the right deal for your insurance
Getting the right deal for your insurance and maximising your chances of a claim being accepted are really two sides of the same coin. In simple terms, the less risk you appear to be, the less you will be charged for insurance cover. Insurance risk is determined by two factors. These are your level of cover and the likelihood of you making a claim.
This means that the first step in getting a suitable deal for your insurance is realistically assessing the level of cover you need. For example, if you only need life insurance to pay off a mortgage, then you can reduce it as the amount you owe goes down. Similarly, if you have home buildings cover then you need to cover the rebuilding cost of your home, not its market value.
Your second step is to take all reasonable precautions to reduce the likelihood of you needing to make a claim. For example, if you’re a smoker, giving up can significantly reduce premiums for certain types of insurance.
Ideally, you should have active proof of any statements you make when you apply for insurance or if you make a claim. You should therefore keep any documents (or photos or videos) that could possibly be relevant. You don’t, however, need to keep them on paper. Electronic records are usually perfectly acceptable.
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