by Ben Salisbury
For all types of insurance it is important to assess your circumstances and choose the right level of cover for you.
With each type of insurance product you buy take some time to compare different quotes to find the best value deal.
Try and select the right level of cover. Don't over-insure because it is unlikely the insurance company will pay out as much as you expect anyway and there is little point in paying extra for a policy that will not pay out at as high a level as you expect. However, neither should you under-insure yourself as if you do need to make a claim you'll want to get back an amount that will cover your loss.
Always pay in full and up-front. Don't pay monthly as you will pay at least ten per cent more.
Be honest with insurance providers and give correct details of the value of your possessions for home insurance, claims history and any points you have on your licence for car insurance, and a realistic appraisal of your lifestyle for life insurance.
If you don't, your policy may be invalid, which negates the point of having insurance in the first place. Also, if you are up-front with the insurer they are better able to help you get a policy that identifies and covers you for risks that are applicable to your individual situation.
Once your risks are identified so that selecting the right policy with the right cover for you has been completed, we come to the negotiations on price. Never accept the first quote you receive. Insurance brokers and sellers of policies are trained to earn their companies money.
Whatever they say, you can get a better deal than their first offer. When negotiating a policy be armed with alternative quotes and make sure that the price you end up paying beats the best quote you have found. Threatening to leave or switch is a ploy that often works and can shave another few per cent from the price of renewal.
So, let's take a look at the main types of insurance and the most important factors to consider for each in terms of finding the right policy at the right price.
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When considering which car insurance policy to choose the most important consideration should be the value of your car. Make sure the policy you get covers the current value of your vehicle.
If you don't drive very often it may be worth taking out a pay as you drive policy. These policies are available though some insurance companies via a broker called Coverbox.co.uk. The insurer has to fit a GPS device to your car to track your mileage and check the times of the day when you drive.
The reason the device has to be fitted is that when you get a quote with them you have to submit an estimate of your mileage and how much of this is done in peak times (Mon - Fri 07.30 - 09.30 and 16.30 - 18.00).. The premium is based on this estimate. If you drive fewer miles or spend less time driving at peak time than you had predicted, you get a refund. If you drive more miles or more often at peak times, you pay an additional charge.
As with all types of insurance, compare different providers to find the best deal. Additional tips that can lower the cost of car insurance are to protect your no claims bonus, increase the excess you pay on the policy and limit the amount of modifications you make to the vehicle.
For most people, their home is the most valuable possession they have so it is vital to get sufficient cover in case of serious damage. If you own the property it is essential that you get both buildings and contents insurance. If you are a tenant then you just need contents insurance.
If you require both types of insurance, you don't have to get them both from the same provider. Sometimes it will work out cheaper to do this, but not always. Some companies are stronger in one area and offer better policies that may suit your requirements better in one area than another, so compare policies and if necessary buy buildings insurance from one and contents insurance from a separate provider.
When you estimate the value of your possessions for the purposes of contents insurance try and be accurate and also take off the value of any expensive items that you have a separate policy for. This should reduce the premium you pay.
Life insurance is not normally reviewed annually so it is even more important to make sure the policy covers the areas you want it to and to check the charges.
Typically, insurers make money on this type of policy through commission and other charges. It pays to do a little research on typical commission rates and charges before applying for a particular policy. This will give you some bargaining power when negotiating rates.
If you have a family, life insurance is a good idea. If you don't then an income protection policy may be worth considering. If you opt for a life insurance policy and you have a mortgage make sure that the policy pays off the mortgage in full if you need to use it. You will pay more for this type of policy but it will make all the difference to your dependants and is just as valuable as providing them with a future income.
One other important point is that if you have a family it is a really good idea to start this insurance as early as possible as the cost is very little and the benefits high in the unfortunate event that you need to use the policy.
Travel and winter sports insurance
Deciding on the best policy in this area depends on where you are travelling, how many times per year and for how long and the types of activities you will be doing when away.
If you travel regularly then an annual policy is likely to be the best bet. If you just travel abroad for your annual holiday a single trip policy is the best choice. If you enjoy winter sports you should pay particular care in checking that you have the right level of cover.
Mike Powell, Defaqto's Insight Analyst for General Insurance, advises:
"Many people will have planned a ski trip this winter, but a key question is whether they have adequate insurance to cover theft of their ski equipment or loss of their ski pass for example. The cost of a skiing holiday and value of equipment will vary considerably. At the same time, however, the type and level of cover provided by different policies also varies widely.
"It is therefore important for skiers to buy cover that meets their particular needs. We would urge people to focus on policy features and not just focus on paying the lowest price for cover - the cheapest option can often prove costly if something does go wrong."
Use Myfinances.co.uk's insurance comparison tools to find the right insurance policy.