Make sure you're covered

Published by on 24 June 2010.
Last updated on 25 August 2011


"Always choose an insurance policy based on the cover it provides as well as the cost of the premium," says Lee Griffin, spokesperson at

"A cheap insurance policy, which doesn't provide the cover you need, is a waste of money."

Travel insurance

The biggie when it comes to travel insurance is having adequate medical and repatriation cover.

Although a European Health Insurance Card will take care of emergency treatment in most EU countries, it's not recognised further afield and costs can quickly stack up.

Griffin says that if you needed to be brought back from the US under medical supervision you could be hit with a bill for £50,000 plus.

As a guideline, travel policies should cover at least £2 million for medical expenses. You should also have, as a minimum, £1 million for personal liability, £3,000 for cancellations, £1,500 for baggage and £250 for cash.

Motor insurance

There are three levels of cover with motor insurance: third-party, which covers you if you cause an accident and is the legal requirement; third-party, fire and theft, which adds cover in the event of fire or the theft of your car; and comprehensive cover, which adds protection for accidental damage.

Which level is right for you will depend on your attitude but, as Griffin explains, will also be down to the value of your car.

"If you have a low-value car, third-party cover could be adequate and cheaper than taking out fully comprehensive insurance with a substantial compulsory excess," he says.

Home insurance

Underinsuring can be a problem with home insurance, with one-in-five of us underestimating the amount we need. But this can cause serious problems if you need to claim, as the insurer will scale back your payment.

For example, if you have £60,000 of contents but only take out £30,000 of cover, if you then make a claim for £10,000 the insurer might only offer you £5,000 as you're only half-insured.

To avoid this, think about the cost of all your possessions and if in doubt go for a policy that automatically covers everything. For your buildings cover, use the Association of British Insurers buildings insurance calculator

And never be tempted to be economical with the truth. "If you have to make a claim and you didn't disclose something initially that may affect your policy, your insurer can refuse to pay out," says Griffin.

This can apply to modifications to your car, pre-existing medical conditions on your travel insurance and lying on your home insurance about having approved locks fitted on your property.


You've never switched provider

If you haven't compared your car or home insurance in the last year, chances are you're paying too much. According to, customers save an average of £211.94 on their car insurance and £145.79 on their home insurance compared with the renewal premium.

Your premium goes up every year

Insurance premiums rise every year, regardless of whether a claim has been made or not. But if you haven't made any claims, your no claims bonus should slow the rate of increase, and in the early years should even put your premiums in reverse.

The cover limits far exceed the value of your items

Some policies offer blanket cover to avoid the risk of underinsurance but if you appear to have a lot more cover than you need, chances are you're paying extra for it.

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