Christmas has begun in earnest and with just two weeks to go until the big day, it’s already time to think about something else. So this week we’ll take a break from festive festivities and focus on something far more important – insurance!
Protecting your possessions, your home, your car, your holiday, your technology or even your life and the lives of your family, is a crucial part of our actual everyday life.
However, the news recently in the Autumn Statement that Chancellor Philip Hammond is to raise Insurance Premium Tax from 10% to 12% from June 2017 raises the spectre of more costly policies and premiums for all of us.
And that’s difficult for those who right now struggle to pay for even the most basic cover to get them out of problems if the worst ever happens.
So what can you do to insure yourself against the impact of these price increases? Here are my five top tips.
Choosing your cover more carefully sounds simple but shamefully it isn’t. Insurance is a minefield and most of us don’t understand it or take enough time to do so. But we have to. I set up Resolver after a bad experience with boiler repair insurance and I wish I’d have read all the terms and conditions more closely or pushed to have them made plainer to me. So many of us are caught in a fear trap of paying out our hard-earned cash each month on policies that actually don’t meet our needs. Read the small print. Ask lots of questions. Ask the people on the phone to explain in full your rights under a policy in various circumstances. Don’t just think ‘it’ll be ok, they’ll pay up’ because usually, it won’t. And they won’t.
So many insurance policies feature optional extras for additional costs that you get sweet-talked into because you fear a doomsday scenario and so rightly you want to be covered for every eventuality. But usually, these items, for everything from hire cars to personal injury, will never be needed. Even if they are, they might not match up to the promise. Consult your policy and strip these back. If you’ve had them for years and never used them, chances are you never will. Write it all down with the associated costs and tot them up. When you see the headline figure you’re paying, you’ll be very surprised at the financial waste.
It’s not your fault if you are sold an insurance policy or cover that doesn’t meet your needs unless you fully understood the policy. If mis-sold then you should complain. We see huge amounts of successful cases around Packaged Bank Accounts that often have insurance elements within them that aren’t correct for the person taking out the PBA. This means they are entitled to money back for being mis-sold. It’s the same with any type of insurance. If there’s an exclusion or a caveat and no-one has checked whether you meet the relevant criteria, you could have a case to raise and if you don’t get satisfaction from the insurer, creating a case on resolver.co.uk means you can escalate it to the Financial Ombudsman Service for an independent assessment after eight weeks or after an agreed impasse between you.
‘I don’t have time.’ ‘I can’t be bothered.’ ‘It’s too much hassle.’ All reasons we tell ourselves for not comparing quotes when our insurance renewals are due. But when you realise you could save hundreds of pounds, you might want to change that approach. What’s also key is to go back to your insurer and ask for further discounts for years of loyalty. Speak to the customer retention team whose job it is to keep you as a customer and give you the best deal. I’ve heard from so many car insurance customers who ring up their insurer with a lesser quote from elsewhere (sometimes even from the same company) and then have both of those costs beaten over the phone when the initial renewal letter quoted a price that was hundreds of pounds higher. If you don’t ask…
How much are you paying over the year for insurance to protect your tumble dryer or washing machine or fridge? Look at the figures over 12 months, you might be surprised that it’s nearly enough to pay for a whole new machine. So what’s the point? It might not even cover you for parts and labour and often the latter is the biggest element of the total bill. Remember, these days many household appliances come with a two-year or even five-year free warranty from the manufacturer or even from some stores. So when you’re shopping around to replace white goods, seek out these deals. Just remember to always register for the free guarantee when you get the product delivered and unpacked. So many of us just throw away the little leaflet that comes with the instructions we also ignore.