We are all tightening our belts, so it is a good time for our top ten credit crunch insurance tips.
1 Don’t buy rubbish
Extended warranty and mobile phone insurances are a waste of money.
2 Use comparison sites
Don’t believe insurers who spend millions berating these sites.
It has never been easier to use them to compare prices on motor and home insurance.
3 Check the cost of your life cover
Life insurance prices have been tumbling, and with almost no mortgage market to give them linked business, life insurers are getting desperate. If you have a life policy bought years ago check out the price now.
4 Don’t buy from banks or building societies
John Prescott may not be the name that first leaps to mind when considering insurance, but few will argue with his comment:
“The banks distorted the market. We gave them stability - the very thing that they had been asking for, for decades. What happened is just total greed. Instead of keeping the supply of money in control, they allowed people to go from two or three times salary, which used to be the building society requirements, to four, five and six times. These excessive loans ramped up house prices."
If you have any existing insurances bought via a bank, apart from a tiny minority of cases, you have absolute freedom to go elsewhere for life and income protection insurances. There are lots of independents offering a better deal.
Why should you give more money to the people who caused this mess?
5 Don’t buy from travel agents
If you have to buy travel insurance, get independent quotes, there are hundreds of companies out there offering insurance.
6 Do you need annual travel insurance?
If you have annual travel insurance but no longer plan more than one trip abroad, take out single trip cover instead.
If you are going on more than one trip abroad, replace single trip cover with an annual policy.
7 Check the excess
If you have a private medical insurance policy consider a larger excess (the amount you pay on each claim).
If your spare cash is very thin, do not risk a policy with a large excess or co-payment.
Any excess must be a figure you can comfortably afford if the worst happens. The worst always happens at the worst time for your cash flow.
8 Get several quotes
Even if a policy looks exactly what you want at a reasonable price, get alternative quotes.
You may find something better or you may just confirm that what you thought was a good deal is.
If you cannot see why your original quote was more expensive than an alternative, go back to the first one and ask them why they are dearer.
9 Trust no-one
If a price and offer looks too good to be true there is usually a catch. Either there are lots of hidden exclusions, or the insurer operates a tough claims policy which will make climbing Everest seem a walk in the park compared to trying to get them to pay a claim.
If the name is unfamiliar ask them how long they have been in business, and which country the insurer is based in.
If anyone refuses to tell you who the insurance company is, or does not let you see detailed information or a specimen policy unless you buy from them, walk away and go elsewhere.
10 Haggle
Now this may not always work, but in this climate financial and insurance companies are competing strongly, sometimes for their very survival, for business.
So always ask if the price can be reduced.
This may be a straight reduction, or an offer of an excess or removal of some cover, to get the price down.
If you have a quote from Company B which is lower than Company A but you would rather buy from A, then tell them you have a better price and how much more expensive they are. They may try to explain away their higher price, or make you an offer on the strict understanding you keep it quiet.
In the current market they need you more than you need them
Health insurance: Hot Topic: May 2008
