Insurance – what do you need and what can you live without? | money.co.uk

many of us are reviewing our personal finances and looking to save money in any way we can. One of the first things that may seem expendable is the long list of insurance policies that many of us have.

But which insurance is non-essential and which should you keep? we look at which policies you can scale back and which ones it would be wise to keep.

Reading: What insurance should i get

car insurance

If you drive a car, it is mandatory to insure it. not only because of the cost you would incur if you had an accident or your car was stolen, but also because it is a legal requirement. It is also illegal to drive motorcycles or pickup trucks without adequate auto insurance.

The minimum coverage for your motor required by law is third-party insurance, so to really save money, you might consider reducing your comprehensive coverage to this minimum. however, as this only offers a very basic level of coverage, it may not be right for you and is not always the most economical option.

It’s usually possible to save money on your auto insurance policy by shopping around to find the most competitive offer.

life insurance

If you have no dependents and no debt, life insurance may not be a necessary expense for you. But if your family members depend on your income, life insurance is another necessity. While we obviously prefer not to think about it, it’s crucial to make sure your dependents are covered in the event you’re no longer available to support them.

You should be able to get a good deal that pays a reasonable amount each month for the peace of mind that your family will be protected. That said, it’s still important to make sure you’re not overpaying for coverage you don’t need.

You may not need to purchase life insurance if your life is already covered by other policies in force. For example, some employers offer ‘death in service’, which means that your dependents could be paid up to 4 times your salary upon your death. check the terms and conditions of your employment to find out if a plan like this already exists. if there is and it provides adequate coverage, you may not need to purchase additional protection.

Another thing to consider is that if you drop your life coverage now, it will likely cost you much more to buy it back later in life. This is simply because you will be older and may have more health problems, so your premiums will start to cost more. As such, keeping the premiums on the policy you already have may be a good idea.

home insurance

If you own a home with a mortgage, homeowners insurance will generally be a required component of your mortgage. but in addition to being essential in this sense, it could also be said that it is essential for your peace of mind.

See also: Can you ask your insurance company to total your car? | CarInsuranceComparison.com

Buildings and contents insurance will protect you financially against damage to your home, accidental or otherwise. as such, it’s something most of us would rather not live without simply because the cost of repairing or replacing something that goes wrong could represent an unexpected expense that you may not be prepared for.

This way, your home insurance policy should be considered a high priority and something you should continue to pay for. As with any type of insurance, however, it’s important to shop around to get the best deal possible, as well as the coverage that suits your circumstances.

Many home insurance policies will cover everyone in the family, meaning even those who are in college or elsewhere can have coverage for their personal belongings, meaning they don’t need to buy additional content insurance while they’re away.

If you rent your home, you won’t have to worry about buildings insurance, but contents insurance can be a good idea to give you peace of mind knowing your possessions are protected. the cost of paying premiums can be much less than the amount you would have to pay to replace all your stuff if it were lost in a fire or stolen, for example.

Still, it’s very important in every housing situation to figure out exactly how much coverage you’ll need and what you need to cover. this way you can make sure you take out the right policy to cover your needs.

travel insurance

Travel insurance is not a legal necessity, but it’s still worth it. That’s because the costs involved if something goes wrong on vacation or while traveling have the potential to be enormous, far more than you’ll spend on premiums to maintain a basic level of coverage.

For example, if you get sick on vacation, the money you’d have to spend on care and treatment could easily run into the thousands, and the cost of purchasing a basic level of travel insurance for a trip is minimal by comparison. Likewise, if your belongings are stolen or your vacation is cancelled, you could end up with a hefty bill, something that would be covered by a relatively small insurance premium.

So it’s definitely worth considering ensuring you have adequate cover when traveling outside of the UK, and taking the time to shop around for a competitive offer will really benefit you.

Also remember to check your existing insurance policies to see if they may cover anything you might otherwise need to take out travel insurance for. For example, your existing contents insurance may cover your luggage, which means you can reduce your travel coverage.

pet insurance

Pet insurance should be treated similarly to travel insurance, as while more of an optional cost, the coverage will prove vital if you ever incur vet fees. If your pet unexpectedly becomes ill and needs treatment, your pet insurance coverage will give you peace of mind knowing that your pet’s well-being is in charge.

See also: How much does a cpap machine cost without insurance

If you find yourself in a situation where your pet needs treatment but you don’t have insurance coverage, you’ll need to pay for your pet to receive ongoing care. With vet fees being so astronomical these days, you could quickly find yourself with thousands of pounds out of pocket if your pet doesn’t have insurance.

If you’re not happy with the idea of ​​paying for pet insurance when you don’t know if you’ll really need it, you may choose to put some money into a savings account. This way, the money that would have gone toward paying premiums will be reserved for your pet if you need it, and if you never need it, you won’t have wasted a dime.

income protection insurance

It’s fair to think of income protection insurance as high priority insurance. If you get sick, have an accident, lose your job, or can’t work, this will pay you tax-free replacement income.

Protecting your income in this way could be vital, especially if you have family members whose well-being depends on the money you earn, or if you are self-employed and unable to support the cost of living. on your own.

If you’re unable to work, losing that earnings line could make unemployment even more difficult for you and your dependents to manage. therefore, paying for income protection can give you peace of mind knowing that you and your family will stay afloat should your employment situation change dramatically.

However, it’s still important to shop for the right type of coverage and only pay for what you really need.

mobile phone insurance

When you buy a mobile phone, you may be convinced to buy some insurance in case it is lost or stolen. If you have a particularly valuable phone, this can be helpful, but generally the high cost of this type of insurance makes keeping premiums uneconomical. It is also possible to add your mobile phone to your contents insurance, instead of purchasing separate coverage.

Also, it’s worth noting that insurance purchased directly from your mobile phone dealer will generally cost you much more than buying it through an independent insurer, so if you must protect your phone, take the time to consider it. one round. instead of settling for what your phone vendor offers.

Similarly, it’s often not worth getting separate warranties from stores when you buy new jewelry, a phone, a watch, etc. That’s because possessions like these are often protected by a manufacturer’s warranty or are already covered by your contents insurance, so it’s always worth checking your contents’ coverage details to see exactly what’s covered. and to avoid paying twice for the same thing. thing.

Generally, the need for insurance, unless legally required, depends on your own circumstances. If you’re paying above the odds, it may make more sense to shop around and find a more competitive offer, rather than canceling your insurance entirely. It will also save you money to make sure you only pay for what you really need, by getting coverage that’s right for you and doesn’t overlap with any other policies you have.

See also: What are the types of home insurance? – Confused.com