Many people regard insurance as a waste of money because you could end up paying hundreds of pounds of premiums but never lodge a complaint. But while you might obtain nothing but peace of mind – which alone is worth the price to some – if you must submit a claim, you’ll be glad you took the trouble to obtain coverage.
Charge of coverage
Insurance offers you coverage against damage or loss in exchange for a monthly payment, annual or single called a premium. The insurer calculates your premium by assessing the risk of something that happens to you – such as your house is flooded – and what it will cost to remedy the damage.
The higher the probability of an event occurring is high, and therefore by introducing a claim, the greater your premium.
Deciding what insurance you need
some types of coverage are forced, as the insurance of buildings for those with a mortgage or third coverage for motorists. But most insurance is not enforced; it simply brings peace of mind and makes life easier if disaster strikes.
In deciding whether you need to cover non-mandatory, consider the impact of something that happens to you and if you could cope if it did. For example, if burgled could you afford to replace all of your business? Otherwise, you need the assurance of content.
The coverage you choose is also dictated by what you can afford. Make a short list of insurance you buy. If money is no object then rank by order of importance, with the coverage you should buy. After that forced cover, most people opt for life insurance. However, it is not appropriate if you do not have dependents. Consider your needs as opposed to cost.
By checking whether you have enough coverage, remember that most insurers stipulate a maximum limit they will pay off in the event of a claim: Check if this would cover your loss.
Revelation of information to the insurer
You must complete an application form to obtain coverage. This involves answering a series of questions, depending on the type of insurance you buy.
Answer honestly, even if you know that this could boost up your premiums. For example, if you request insurance content at home and the insurer asks whether you are a smoker, do not tell him that you are. A smoker increases your risk and your premiums, tell the truth because if you are, the insurer may refuse to pay out on a claim. It is better to pay higher premiums to ensure that you are covered.
If you have any pre-existing medical conditions, mention them to the insurer or broker: Do not wait to be asked. It is better to be safe than sorry.