Insurance is one of those things we all like to get out of the way, with minimal fuss and without parting with too much of our hard earned cash. But what do you really look for when buying insurance? Do you even know what you're buying?
With decades of ever increasing small print and lengthy contracts, consumers have been pushed towards mainly considering the price which ultimately means that people have been buying products which they neither understand nor are able to use.
We're here to help. We've out together some things to consider when buying your insurance. Let's take a look:
This basically means the terms, conditions and definitions of insurance coverage as they are written down in the insurance policy.
It is the law that this document is made available to you prior to purchasing your insurance, so please always make sure you at least skim over the wording before you choose a product. We have chosen a few key areas that you should look at but it is imperative you understand the wording to get the most out of your insurance.
Imagine buying a car without looking at the engine? There are some things you should always check before buying any insurance! And they're all found in this sometimes overwhelmingly long document full of small print.
Definitions are usually found somewhere near the beginning of your policy wording documents. The definition that the insurer has chosen to use is legally binding within your insurance contract. Sometimes the terms are a little different to how you use them in your everyday interactions.
For example, consider the the word family and how you may understand it. Does it mean: your spouse only, your children as well or even extended to your cousins?
These definitions are crucial to understanding your coverage and ultimately the terms used in your wording document. If there is any ambiguity, simply make sure you get the definition explained by either your broker or insurer.
In recent years, insurance has been pushed towards a product which is seen as a necessary evil rather than a positive enabler. Ultimately, insurance is there to help you from financial loss.
Consider motor insurance, people generally dislike paying their premium, however, in the event of a crash, are glad when their insurance pays out.
The problem is that price comparison sites have made it all about the price, it's in the name after all. Whilst saving people money, this has been disastrous for competitive insurance products that may provide substantial coverage and low excesses.
So, make sure that you read your wording and other documents, look at claims records and ask questions when buying your insurance. Price is important but ultimately: more often than not, the less you pay, the less you get and the less reputable the insurer.
We're not saying you can't get a great deal but make sure you do your research!
Exclusions can either be found in each specific cover section or in their own 'Named Exclusions' section. If an exclusion is named within the policy then it will not be insured against.
However, if the item is not specifically excluded then, as the buyer, you can assume that it should be covered by the insurer. If you're still not sure, it is always worth checking.
But don't let anyone pull the wool over your eyes, if it's not specifically excluded then it's not excluded.
There are generally two different types of requirements that exist within a personal lines insurance contract.
The first are those named warranties. While they may not be labelled as such, they often include clauses such as: "You must supply the insurer with proof of purchase within 14 days of the policy start date". This means that you have to do this within the given time-frame otherwise the policy will be canceled.
Requirements include things such as your security requirements, which mean, for example: on contents insurance, that in the event of a claim, you must have made sure that your doors had the appropriate locks or that an alarm was active whilst away from the home.
The 2016 Insurance Act, makes it the responsibility of the buyer to prove that all information given to the insurer ought to have been correct to the best of your knowledge at any time during the insurance contract.
For example, this could include the type of driving that you're using your vehicle for, when buying motor insurance. If you're commuting then you must be honest and declare this, even though it means an increase in price.
This is now the law and if you are found to be breaking this rule, your insurer has the right to cancel your insurance from inception with no refund and void any possible claims.
This same applies when claiming. Always be honest with the insurer as this could lead to a whole host of problems down the line, including criminal convictions.
Remember when you were at school and the teacher told you to ask questions? The same goes for insurance.
Understanding what you're buying is everything and sometimes we all need a helping hand, no question is a stupid question and it's better to know rather than be stuck with ambiguity. We hope this helps, and if you're still not sure, we're here to help. So, ask away!
Happy insurance hunting.