The importance of ensuring that you are properly insured

Insurance might not be the first topic which comes to mind when you are trying to make light-hearted conversation, but it may well be the first topic which comes to mind when you are dealing with a challenging situation. It can be difficult to make generic comments about insurance because we’re all individuals and as such have our own individual needs, but it’s actually fairly easy to dispel some objections to taking out insurance.

It costs too much There are various factors involved in the price of insurance but perhaps the most obvious is risk. In short, the more likely it is that you will need to claim on your insurance policy, the more that insurance policy is likely to cost. Obviously, there may be times when you and insurance companies have a different idea of how big a risk you are, for example, you think that your local area is a flood risk but insurance companies may disagree. In general, however, if you could reasonably view yourself as a low risk for insurance companies, then you can expect to pay relatively low premiums and while the opposite is also true, if you know you are a high risk then there is even more of an argument for having insurance to cover the risk. It’s also worth noting that in many cases you will have some degree of control over the cost of your insurance, for example if you are looking for health insurance then smokers can expect to pay more than non-smokers, hence, there is yet another benefit to stopping smoking. Even when there is little you can do to change your level of risk (and hence make yourself a more attractive customer), you may still be able to influence the cost of your insurance premium in other ways, such as by agreeing to pay a higher excess in exchange for a lower price.

There’s no real benefit to it As a minimum, insurance can bring you peace of mind. It can also help you to manage your cash flow. Insurance premiums are predictable monthly payments and insurance policies will state the excess you have to pay on any given claim. After this, however, any costs which fall under the remit of your policy will be covered by your insurance company. You won’t have to find yourself scrambling for cash or trying to get finance to cover the expense. The basic rule of thumb with insurance is that the more something matters to you, the more effort you should make to protect it. For example, a solid pet insurance policy may mean the difference between being able to afford treatment for a beloved pet or having it put to sleep. Mobile phone insurance, by contrast, may or may not be worthwhile depending on your mobile. If you have a top-of-the-range handset, it may indeed be worth protecting, but if you’re happy with a cheap-and-cheerful one then you may be perfectly happy with the idea of just going out to buy a new handset if necessary.

Insurance companies won’t actually pay out unless they absolutely have to This is probably true but also rather misleading. No company is going to make payments unless they have a genuine reason to do so, but any company which understands the importance of good customer service is most certainly going to pay out if a customer has a genuine claim on them. At the end of the day, insurance fraud is real and so it’s understandable that insurance companies tend to want some kind of substantiation of claims. At the same time, however, if an insurance company were to get a reputation for unreasonably denying genuine claims, then it would probably soon find itself in trouble with both the regulators and the media.