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Author: Internal Customer Services Agent

Editor: We are not insurance advisor's and are not making any recommendations, this article was written to provide some interesting points to think about when deciding whether to take out an insurance product.  

Common facts to consider when choosing insurance policies

There are a whole host of different insurance policies which an individual may have at any one time and these policies are designed to primarily secure the protection of either us or the things we own. There are a range of policies which we simply cannot do without as well as others which are somewhat ‘optional’. Typically a consumer is likely to have at least a policy covering their vehicle, should they have one and a policy for the contents of their home. Aside from these there are policies which cover your electronics, such as your mobile phone or a tablet as well as insurance for specific items such as an expensive watch or piece of jewellery. Whereas having car insurance is a legal requirement, insuring your mobile phone is down to the preference of the individual. Many of us can be somewhat confused regarding exactly how these policies do and do not serve us and this is often the case with specific scenarios which might occur. Ultimately if you have an accident in your car or suffer a theft whilst on holiday you want to have peace of mind that the insurance policy you have in place is able to cover the costs or losses which may be incurred by you as a result. The question we often have concerning our insurance policies is whether or not they really will cover your individual circumstance and as such there a number of common misunderstandings concerning this. Today we will be exploring these insurances in greater detail to hopefully provide a greater level of understanding

First and foremost we will cover the insurance policies we don’t legally have to have and don’t know if we should therefore bother with. Take the most common example; mobile phone insurance. The number of consumers taking mobile phone insurance is steadily increasing due to the fact our devices are continuing to increase in value, therefore the cost of replacing should they break increasing also. This, coupled with the fact that the vast majority of us pay for the cost of our devices on a monthly basis, means if we have to pay to replace them we could still be paying for the old one as well for months to come. Although this has always been the case to an extent with mobile devices, this is more so than ever before because the devices themselves are more powerful and better able to provide a host of services we use in our everyday lives. Therefore the question is, should we insure our devices? Given all the points discussed here I think the most obvious answer is yes as not doing so may lead to you making continued repayments towards a device you no longer have.

Once you have decided that you want protection for your item, the next thing to check is whether you already have it covered elsewhere, and then whether that cover is sufficient. There are many people who, inadvertently insure a specific item twice. This means that they are paying more than they need to, but if they do make a claim they will only be able to claim on one of the policies. The most common time this happens is with items that are covered by household insurance. Many of these household contents policies will cover certain items when away from your home, so if you are worried about your mobile getting lost, stolen of accidently damaged, then you may already be covered for this under your household policy. On the other hand many household policies do not cover the malfunction of these goods outside the manufactures warrantee.  Therefore if you want to protect your item from simply ‘breaking down’ then you may need a dedicated insurance policy.

The key with such insurance is certainly to shop around and not to automatically take up the insurance which is offered directly by the provider. Find a policy which meets your realistic needs and covers the situations that may occur in your typical day. Once you have done this then you can choose the best priced product.

Another thing that people need to consider, both when choosing the policy and also when making a claim, is the insurance excess associated with the policy. The excess is the amount that the policy holder will be required to pay towards the cost of the repair or replacement. For example if you device had a £50.00 excess and the cost to repair the screen was £70.00, then you would have to pay the first £50.00 and the insurer would pay the remaining £20.00. Of course if the cost was a total replacement at £600.00, then paying just the first £50 does not seem so bad. Excesses can range from just a few £ to perhaps £50 or more for specific item insurances, or may be set at a few hundred pounds if claiming on a household insurance.

The key with any form of insurance policy, compulsory or otherwise is to ensure you tailor and select a policy which is able to meet your unique requirements. If you have any concerns over whether an insurance policy if right for you, it is worth taking the time to ask the opinion of an advisor or reading the key information provided by the insurer before agreeing to the policy. In the vast majority of cases an insurance policy will run for a minimum of 12 months and therefore it is really important the right resource is selected at the time of purchase.