Protecting your possessions, home, car, holiday, or even your life and the lives of your family is crucial. However, the announcement in the Autumn Statement that Chancellor Philip Hammond is to raise Insurance Premium Tax from 10 per cent to 12 per cent from June 2017 raises the spectre of more costly policies. So what can you do to insure yourself against the impact of these price increases? Here are my five top tips.
Understand your policy
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. Read the small print. 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.
Don’t pay for extras you don’t need
So many insurance policies feature optional extras for additional costs that you get sweet-talked into because 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.
You don’t have to accept mis-selling
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, you can escalate it to the Financial Ombudsman Service for an independent assessment after eight weeks or after an agreed impasse between you.
There’s no need to accept a renewal quote
“I don’t have time.” “I can’t be bothered.” “It’s too much hassle.” All are reasons we give 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. If you don’t ask...
Product cover sometimes isn’t worth the paper
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 find 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.
These days many household appliances come with a two-year or even five-year free warranty from the manufacturer or even from some stores. Just remember to always register for the free guarantee when you get the product delivered.