August 10, 2022
6 Important Things to Watch Out For When Buying or Renewing Insurance

If the length of your current insurance policy is coming to an end, it can be easy to simply renew it without giving the process much thought. But before you commit to this decision, it’s worth reevaluating the terms and costs, your own needs, and whether they align. The same goes for purchasing insurance for the first time. 

There are a number of vital steps you should take before investing in a policy to ensure it’s the right choice for you and your current requirements. With that in mind, here are some of the most important things you should watch out for when buying or renewing insurance:

The coverage you require

It’s important to consider exactly what you want to be protected from, whether that means home burglaries, illnesses while on holiday, or damage to mobile devices. Once you’re perfectly clear about your top priorities, it will be easier to find the most suitable features and you might even manage to save some money in the process as well. 

Another aspect you should think about is who the policy is meant to cover. Is it only you or also your partner and/or the household? You may find that insuring the entire family is often more affordable than taking out separate policies.

Knowing what isn’t covered

What’s arguably even more crucial than the coverage is what isn’t covered by the policy. That is where most people tend to trip up. Carefully read the exclusions and make sure you are satisfied with being uninsured for the listed items. 

As many cell phone policies don’t include water damage, for example, choosing different levels of cover might be best if you plan on spending time near the water. No matter the circumstances, ensuring the policy exclusions suit you is necessary for avoiding any unpleasantries or attempting to claim something that isn’t covered in the future.

Paying for unnecessary coverage

It’s not uncommon for individuals to be paying for coverage they don’t need through unsuitable policies, such as buying single-trip insurance over annual family travel insurance or having a courtesy car option when owning several vehicles. But what’s even more damaging is junk insurance, a type of add-on insurance that provides useless coverage to consumers and is sold using deceptive and unethical practices. 

Paying for junk insurance unknowingly can add up to thousands in unnecessary expenses each year. Fortunately, you can claim a junk insurance refund with the help of experienced professionals and get your money back. In the future, always read the terms carefully to ensure the coverage is exactly what you asked for.

Increasing the insurance excess

Insurance excess represents the amount you have to pay with each claim you make. In many cases, the total excess will be comprised of voluntary and compulsory excess, especially when it comes to car and home insurance. 

While compulsory excess is set by insurance providers and can’t be controlled, you can usually select the amount of voluntary excess you would be willing to pay. If it’s possible and agreeable with your budget and overall insurance needs, it’s advised to increase your voluntary excess in an effort to pay cheaper premiums as a result.

Reconsidering the lowest quotes

It’s no secret that the insurance market is incredibly competitive, with providers attempting to attract consumers using particularly affordable offers. However, going for the cheapest option might not always be a good idea, as it may not provide the coverage you require. 

Paying a bit more generally comes with a more comprehensive cover, by providing higher claim and policy limits, fewer exclusions, lower compulsory excess, etc. For this reason, shopping around, comparing quotes, and fully understanding the terms is always recommended.

Being honest and accurate

When applying for an insurance policy, consumers have a tendency to be economical with the truth. Underestimating the number of rooms in your home or the value of your belongings can make policies a bit cheaper. However, this is quite an unnecessary risk, considering the fact that lying could cause your claims to be reduced or rejected. 

It might even make it more difficult to get insurance further down the line, and your quotes could also end up being more expensive. Instead, aim to answer all questions honestly and as accurately as possible to ensure proper coverage.

Summing up

Purchasing or renewing an insurance policy doesn’t always have to be difficult. Use the tips mentioned above to avoid common mistakes, make wiser choices, and ensure the entire process is as smooth as possible.

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