Why do I need Insurance?
Your insurance policy will pay out a sum of money when an event that you are
insured against causes a loss of some sort. Primarily you need insurance whenever:
|
|
An event could happen to
you and you would not be able to afford the outcome, for example
the filing of a lawsuit against you. |
|
|
Whenever the law says that you must
have it, for example, motor insurance. |
|
|
You want to provide for someone in
the event of your death, who couldn't manage financially without
you. |
The state does provide a limited number of insurance
benefits but they are low and require that you pass a number of tests before
qualifying for them.
What affects the level of my Insurance Premium?
Insurance
companies base their premiums on a whole range of factors. Data
and statistics related to these factors are analysed until the
risk associated with almost any situation is known. It is based
on this calculation of risk that an insurance company charges
you,
the
higher the risk the higher the premium. This is why it is often
very difficult to compare your insurance quote with someone else
to see
if you are getting a good deal. Everyone has different circumstances
and thus will have different quotes.
What do I need to look for when buying Travel Insurance?
There are two main aspects to check when purchasing travel insurance,
the amount of cover offered and the scope of the cover. Insurers
generally express the amount as the maximum amount that could
be received. Below is a general idea of what you could expect.
Medical cover at least £1m, personal liability £1-2m,
legal expenses £10-25,000, personal belongings £1,000,
and cancellation £3,000.
The scope of the cover is just as important, especially if you
are going on an activities holiday, or one where you expect to
do sports
that may be considered dangerous. Certain things may not be included
such as off-piste skiing, or skydiving. Policies differ dramatically
in how they cover such activities.
Can I reduce my premiums by increasing the security of my house?
It is possible to qualify for a discount on your house insurance
premiums by increasing the security of your home. This deters
burglars and thus makes your house a lower risk in the eyes of
the insurer.
The sort of things an insurance company will take into account
are approved locks on all external doors and windows, an alarm,
and an
active Neighbourhood Watch scheme in your area. The alarm must
be designed and installed by a company that meets the requirements
of
the National Approval Council for Security Systems.
If increased security measures have enabled you to get some form
of discount on your insurance, then you must ensure that whenever
the house is empty, they are used. If not, and your house was
broken into, the insurer would have reason to challenge the claim.
Remember
if you can't find the answers to your specific question please
contact us with your question or to arrange an appointment to
discuss your
personal circumstances.
What is the point of taking out a mortgage protection payment policy?
As indicated elsewhere, there are two types of mortgage protection
policy. If you've got dependents, a life insurance just in case
you die will keep the roof over their heads. Of course, if you're
single
you don't need to since the lender can just sell the property
to get its money back (providing you are not in negative
equity).
On the other hand, did you know that some 134,000* repossession
orders
were issued in 2000 and approximately 50,000 were executed in
the
same period? Many of these are for those cases where the homeowner
could not keep up the repayments because he was out of work.
So, if you become redundant or unable to work through injury
or illness,
a policy to pay your monthly mortgage expenses is just the thing.
* Source: Office for National Statistics, Social Trends 32
I'd heard that the State will pay my mortgage interest. Isn't this
right?
Yes - and No. The State will pay a standard amount towards
your mortgage interest after a waiting period - provided you
qualify for income support. This means you need savings of less than £8,000!
And the waiting period, unless your mortgage started before October
1995, is 9 months. The benefit is called Income
Support for Mortgage Interest (ISMI).
| The Financial Services Authority does not regulate general insurance advice,
although it does regulate the financial soundness of insurance companies. |
Hedgelands Financial Services Ltd, Hedgelands, Abbotskerswell, Newton
Abbot, TQ12 5PW
|
 |
Phone
our General Insurance Hotline on
0845 165 1281
|
|
