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Buying insurance

There are lots of ways to buy insurance to cover almost every risk you might encounter. You could:

  • buy insurance directly from an insurance provider or your bank - either in person, online or by phone
  • use a price comparison website, which will compare the cost of insurance from different providers
  • contact an insurance broker, who will find an insurance product to suit your circumstances

Sometimes you might also be offered certain insurance cover as part of a purchase, or have it included within a policy you already have in place.

Examples of 'bundled insurance' could include:

  • Travel insurance that comes included in the price of your holiday or travel booking
  • Breakdown cover that comes free with your car insurance
  • Identity theft cover that's included with a credit card

In addition, on certain items, you could also be offered an extended warranty as an incentive to purchase, in addition to any warranty or guarantee period required by law.

Examples include:

  • Warranty cover that comes as part of the deal you've negotiated for a used car.
  • Extended warranties and cover that come with the purchase of new products (for example, a washing machine)

These types of insurance and/or warranties might provide all the cover you need. Be aware, however, that you may find more comprehensive, or more flexible cover that better suits your needs if you purchase it separately.

How to compare policies and quotes

When you're looking at the cover offered by different insurance providers, it can be hard to make a useful or meaningful comparison.

For example, one might offer a lower premium, but include a higher excess payment in the event of a claim. Another might include a broader range of cover and benefits, but at a higher premium.

How do you go about selecting the right policy?

  • Start with the basics
    make a list of all the elements of cover, the terms and the benefits you actually need, or want.
  • Focus only on the policies that provide essential cover
    all of the elements of cover that you consider essential. Anything else offered can be considered a bonus.
  • Consider what isn't included
    in many ways this is more important than what is covered. For example, your travel insurance might exclude claims relating to pre-existing medical conditions.
  • Now make your final selection based on these 3 criteria
    price, payment terms and - often overlooked - the provider's reputation in the eyes of its existing customers: check the internet for customer reviews. They can be a big help in making your decision.

Reputation matters

While price may be a deciding factor when it comes to choosing insurance, it's a good idea to check out a provider's reputation before committing. There are plenty of review websites that will give you genuine, honest and unbiased reviews from a provider's existing customers.

You might want to find out:

  • What percentage of claims are settled without challenge?
  • How easy is it to make a claim?
  • How quickly are claims settled?
  • How satisfied are the provider's existing customers?
  • What kind of support did the provider offer during an emergency?

Increasingly people want to be reassured that their money is going to organisations whose values are aligned with their own. Paying a little more to insure with a brand you value and trust may be more important to you than going with the provider offering the cheapest cover.

You may also want to do a little research about a provider's ethical or environmental credentials, before committing to them.

A few things to watch out for

  1. Always check the detail of an insurance quote
    You'll want to make certain that it suits your individual needs. For example, can you pay in monthly instalments? Does it offer payment holidays if you need them?
  2. Make sure you provide accurate information
    Answer any questions asked honestly when applying for a quote. If you don't, there's a chance that a claim may be reduced in value, or your policy might get cancelled altogether.
  3. Remember to update your policies
    Your needs will change over time and it's often a requirement of an insurance policy to let them know of any changes to your circumstances. If you don't, it's possible for a claim to be rejected.
  4. Review your cover from time to time
    For general insurance (e.g. car or home insurance) you could do this each time your renewal is due. For other, longer term cover (e.g. life insurance) you could review your needs at significant life stages, like getting married, moving in with a partner or starting a family.

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