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When is insurance a waste of time? We insure many things in life, vehicles, possessions, loss of limbs, loss of earnings, fire damage, flooding and leaks, family, pets and almost anything that you can think of. Insurance companies must be one of the most successful and lucrative businesses to be involved in. It’s as though they have a licence to print money. Not many of us would say that insurance is value for money when we come to pay for the service. The thing is many of our insurance policies can be a nightmare to understand and we might find that the cover we think we have is not quite what we think it is. When we come to make a claim we can find that what is written in the small print excludes us from being successful. Some minor clause or infringement will deny us the restitution we think we are entitled to. In many cases the insurance policy is not worth the paper it is written on and if we analyse things we might conclude that we are wasting money having a policy in the first place. Take household contents insurance for instance, unless we itemise all of our possessions when we come to make any claim against loss or damage of an item we might discover that our premiums only provided cover to a certain level and that by having possessions that increase the total value of all of what we own, even by a small amount, will make any payment void. This means that we should provide cover above the total value of our possessions. If the value comes to £40,000 we should take out insurance for £45,000 or more. If we had insurance cover for the lower amount and then bought goods which raised the total value above that amount we wouldn’t be covered for any loss. Sometimes it just isn’t worth having the insurance in the first place. Sometimes the premiums we pay would be sufficient to replace any losses that might be incurred. Certain types of insurance are necessary of course, vehicles and bricks and mortar for instance. Liability insurance is probably one of the most important and essential insurances we can take out. I have home insurance (the building itself against fire and other damage), contents insurance, public liability insurance, life insurance, vehicle insurance but I do not bother with individual items such as mobile phones and other minor possessions. Another kind of insurance is the one that is disguised as an extended guarantee for new electrical goods. If the goods become faulty within the guarantee period there is no need to take out insurance against it being faulty during that period and with most electronic goods if they are going to fail it will be inside of the first twelve months else they won’t become faulty for years. Any insurance payments would cover the cost of replacing most things by the time they need replacing. So insurance is a good thing but it can be a waste of money if it is not essential or if it is the wrong type of policy. Before forking out the cash it is wise to assess the real need for cover and only pay for it if it is absolutely necessary.

Shirley Anne