Buying insurance isn’t something you do on a whim. Unfortunately, it may be something you buy in a rush – especially if you needed it yesterday or for formal reasons (such as getting a mortgage). But when it comes to purchasing a cover plan, make sure to reflect. Taking the time to consider just what you’re buying, where and from whom will save you a lot of hassle in the future.
Shopping Around: Don’t rush buying insurance
Many people buying insurance simplyuse online comparison sites. They can indeed be useful. In particular, many of them show the cheapest insurance options first. This is often done as a hook to draw you in and brings us to our first point: cheapest isn’t always best.
When buying insurance, there are a few “main” options:
- Building societies and banks
- Comparison sites (as mentioned before) as well as online insurance companies
- Supermarkets/department stores.
- Independent insurance brokers
Important: Comparison sites are not the be-all and end-all of buying insurance. In fact, there are many more providers which are not listed on these platforms. When shopping around, make sure to try a mixture of all four options.
Buying Insurance – Comparing Like with Like
When comparing cover policies, different types, charges and levels of cover can be calculated differently depending on the provider. Some insurer may decide to set voluntary excess to a very high level – which then makes their premiums appear relatively cheap to unsuspecting customers.
What you should do here is take a look at each individual feature and compare them. So, compare excess with excess, premiums with premiums, deductibles with deductibles… etc. when buying insurance.
Individual Policies – Do they cover everything you need?
Don’t rush through this process. Make sure you read the policy document. At the very least, you should be examining features that are important to you. These can usually be found in the policy summary. But why should you take the time to do this? The answer is very simple…
You could end up wasting your money on buying insurance features you don’t need. What’s also handy is that you normally have a “grace period” after buying a policy which allows you to change your mind. So, even if you’ve purchased cover you can still backtrack.
The Truth Bomb: Answering the insurer’s questions
It doesn’t matter how you buy insurance – online, over the phone or filling out an application form. You still need to answer your insurer’s questions as honestly as possible. Should it be found out that you were lying, you could risk your policy being cancelled. Any future claims you make may also then simply be rejected.