Buying insurance

There are three main categories of insurance which cover your house, your car and your life. There are hundreds of different policies available and you need to shop around for the best deals.

Household insurance dreamstime_99312.jpg
The cost of household insurance will depend on a number of different factors including the size and type of your property and your postcode.  Discounts may be given if you belong to a Neighbourhood Watch scheme or have security devices such as alarms.

There are two types of cover; buildings and contents insurance.

Buildings insurance covers the structure of your home including fixtures and fittings and insures it against damage by fire, storms, flood and subsidence.  This type of insurance is mandatory if you have a mortgage and the largest amount you can claim against your buildings insurance is the cost of replacing the entire structure.

Your contents insurance covers you for loss or damage to the furniture and other possessions in your home.  The majority of policies provide for replacing old for a new equivalent.  It is sometimes possible to extend your policy and pay extra to cover damage or loss to individual items such as computers or valuable pieces of jewellery outside, as well as inside, the home.

Many home insurance companies offer extra discounts and incentives if you buy buildings and contents insurance together or buy online .

Hands protecting a carMotor insurance
It is illegal to drive any kind of vehicle in the UK without motor insurance.  The amount that you pay will depend on your age, the type of vehicle and engine size, where you live, whether you have had accidents and occasionally your job.

Women sometimes get cheaper motor insurance as do those who do not have other named drivers on their insurance, have not made a claim against insurance or are willing to accept a higher excess.

Third party only is the minimum level of insurance required for drivers. This covers your legal liability for injuring other people or damaging their vehicle.

Third party fire and theft is the same as third party insurance but also includes cover for loss or damage to your car if it is stolen or damaged by fire.

Comprehensive is the most expensive type of motor insurance and protects you against accidental damage to your car as well.

last_will_2.jpgLife insurance
You need to take out life insurance if you have dependents e.g. children, who you wish to be secure financially in the event of your death.  What you pay will depend on factors such s your age, state of health, sex, whether or not you smoke and any previous serious illnesses or medical conditions.

Term assurance
This is ideal for those if finance after divorce is tight.  It is cheap and simple and pays out a fixed amount of money (the sum that is ‘assured’) if you die within a specified period but nothing if you live beyond that term.  It provides useful cover for the period of a mortgage or until your children are grown up for example.

Whole-of-life
This insurance is more expensive but will cover you until your death and any dependents will receive a payout.  Now would be a good time to write a new will.  Many policies also include a ‘with profits’ clause under which dependents get a share of any profits made by the insurance company.

 

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