Protecting yourself and your loved ones

Insurance policies can be important: not only can they give you peace of mind, they can protect you and your loved ones should some unfortunate event come your way. But are all insurances necessary? Here we look at the main types of insurance and what you might want to consider when deciding to keep or cancel your insurances.

General advice on insurance

There are all kinds of insurance, too many to mention here. While some insurances might not be necessary others might be essential for you and your personal circumstances. If you are considering taking a new insurance policy you should always shop around to find the best deals.

Motor insurance

This is probably an obvious one. If you have a vehicle it’s a legal requirement to have insurance. The minimum requirement is that you have third party insurance. If you have comprehensive cover you could see if reducing your cover to third party saves you money (although this won’t always be the case, especially for young drivers). However, keep in mind this is a basic form of cover and might not be adequate for your needs.

Life insurance

There are a few things to consider here:

• If you don’t have and dependants or debts you might not need life insurance right now.
• If you have dependants, especially if they depend on your income – life insurance is a must.
• Many employers offer a ‘death in service’ benefit for their employees. Check your contract or ask your HR department. If you have this benefit you might not need life insurance.
• You should also keep in mind that if you cancel your life insurance now, it is very likely to cost more when you take it out again later.

Home insurance

There are two kinds of home insurance – contents and building insurance. Building insurance covers your physical home such as your roof and walls. Contents insurance covers your items within the household.

Which insurance you need will depend on your circumstances. If you rent, then it’s the responsibility of your landlord to have building insurance. However, it’s probably makes sense to cover your possessions with contents insurance. If you own a home (with a mortgage) you will need buildings insurance and again it makes sense to cover your possessions with contents insurance.

Travel insurance & pet insurance

Neither of these expenses are a legal requirement. The main thing to consider here is if the worst came to the worst, could you cover the cost? In most cases the answer will be no. For peace of mind keeping or taking out both of these insurances is likely to be a wise decision.

Some bank accounts and insurance policies include travel insurance as a part of the service they offer. Have a look to make sure you don’t already have travel insurance.

Mobile phone insurance

When you buy a phone, the shop you buy from will usually offer your phone insurance. If you have an expensive phone, this insurance may be worth taking, but in most cases the expenses premiums to cover the phone are generally not worth it. Instead, you should see if it’s possible to add your mobile phone to your contents insurance (if it isn’t added already).

Extended warranties on consumer goods

Extended warranties are usually a form of insurance that covers repair costs on a product after the manufacturers guarantee has expired. These days this kind of cover may not be as relevant. The cost of goods such as fridges and washing machines are reducing, and the reliability of these products is increasing.  You also have the Consumer Credit Act 2015 on your side. This usually covers you for six months but in some cases for even longer. If you feel that getting this cover is important to your circumstance, make sure you shop around first and always read the small print.