Insurance plays a vital role in the economy. It allows individuals and businesses
a degree of protection from the impact of unexpected and damaging future events.
You can insure against all sorts of risks, there is almost no limit. Under general
insurance we have focused on three main types, household insurance, motor insurance,
and travel insurance.
House Insurance
House insurance
comes in two types. Buildings insurance and
house contents insurance. Buildings insurance covers the structure of the home
and pays the
cost of any repairs or rebuilding that is carried out as a result of your home
being damaged by any unforeseen events, as detailed in your insurance policy.
The sum insured under the policy must be for the full cost of rebuilding your
home. It is your responsibility to ensure that the sum insured is correct.
If your house is significantly underinsured your costs may not be covered or
the claim could even be rejected.
House contents insurance covers the cost of replacing your possessions. Anything
that you would take with you, were you to move house, is covered against loss
or damage caused by the list of risks detailed in your policy. There is a wide
range of cover available, ranging from 'indemnity
policies' to 'new for old'
policies. Some insurers will now base the policy on the number of bedrooms
that you have, removing the need to value your possessions.
Premiums can be affected by your postcode. Your postcode can be used to gauge
the area where you live, to see if it is a high crime risk area, or if it is
a part of the country that is susceptible to flooding, for example. There is
little you can do about this, but if you reside in a high crime area additional
security measures can sometimes reduce the premium.
The risks for which you are covered are listed in your policy. It may be desirable
to widen your cover. This can be done by insuring against accidental damage
in the home: Extended accidental damage covers any accidental damage to the
property like falling through the attic roof, breaking a table or paint spillage.
As it is more comprehensive an extra premium will be payable.
Car Insurance
You are required by law under the Road Traffic
Act to be insured against liability in the event of injury to other people or
for damage
to someone else's property as a result of you using a car or vehicle on the
highway. There are three main categories you can choose from - 'comprehensive',
'third party, fire and theft', and 'third
party only'. How you choose to insure
your car depends on the level of risk you are prepared to take and how much
risk you want the insurer to take for you. Premiums vary according to whom
will drive the car, its type, where it is to be kept and what the car is to
be used for. The type of cover will also affect the premium, comprehensive
being the most expensive.
Travel Insurance
A typical travel insurance policy provides five main areas
of cover:
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Medical Cover |
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Is perhaps the most important
part of any travel insurance policy. If you are taken ill whilst
abroad it can soon become a very expensive situation. Medical
cover will meet the costs of such things as emergency medical
treatment, and the expenses that arise from returning home
early due to illness, or even death. This usually forms part
of all travel insurance but it is wise to ensure that you have
the level of cover your require. |
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Personal Liability |
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Covers the cost of any claims that
are filed against you for injury or damage to others and their
property. As with medical cover, personal liability forms a
part of most travel insurance, and can extend to £2 million,
even on cheap policies |
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Legal Expense |
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Covers legal expenses that result
in an attempt to claim compensation or damages following an
injury to yourself or death. You cannot usually claim against
the tour operator, travel agent or carrier. |
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Cancellation or Curtailment |
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you may claim your expenses back
if you have to cancel your holiday due to an unforeseen circumstance
such as an illness or accident. You can often opt out of this
part of the policy. |
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Personal Belongings |
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Insures your belongings whilst
you are on your travels. Protect yourself from theft or loss
of money, passport, and other such valuables, or damage to
any personal belongings such as bags, clothing and cameras. |
| 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
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Phone
our General Insurance Hotline on
0845 165 1281
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