Insurance World

You’ve probably got contents insurance for your belongings but are you aware just how easy it is to fall behind in calculating the value of them?

What do you imagine the average contents of a family home are worth - Ј25,000 or Ј30,000? In fact this figure, for a typical home, is estimated to be over Ј45,000. Apart from your “moveable items” of carpets, furniture, curtains, it’s probable that electrical goods purchased over the last few years explain the sudden rise. It’s not unusual to have three or four mobile phones, a couple of computers, possibly also a laptop. Then there are the TV’s. Apart form the large family wide screen digital HD ready, singing and dancing set, there’s probably a another one in the kitchen and two or three others in the bedrooms, not to mention DVD and video recorders. Probably the children have iPods, gameboys and whatever else is “in” at present. Don’t forget your CD collection – Norwich Union values these at Ј10 each and DVD’s.

Apart from the risk of damage, all the above items are very appealing to the thief, being easy to handle and finding a ready market. Don’t forget the garden, the mowers and garden machinery, contents of the shed and garage, garden furniture and even your tubs and hanging baskets. The value of plants can add up too!

Should you need to make a claim, it’s important that you’re not under insured. If the insurance company judges that you don’t have adequate insurance, the claim will not be fully paid. This means that if you have insured your contents for, say, Ј20,000 and your insurance company considers there would be a value of Ј30,000 to replace them, then there would be a shortfall of Ј10,000.

Insurers handle things in different ways. For example Norwich Union Direct, one of the major insurers, will pay out up to the amount for which you’re covered. It’s left up to you to fund the difference. More Than tells us that their policy on underinsured claims is to reduce them by up to 20%. In fact More

Than are taking action to ensure that clients are more up to date with their cover and so have recently increased the this for all their clients, by 25%.

These increases will apply on the clients’ next renewal dates. No doubt more insurance companies will look at following suit soon.

Whilst you’re thinking of re-assessment, maybe it’s time to check the current figures on your buildings insurance. As well as the house, garage and outbuildings, you may have fixed items such as lighting, hot tubs and permanent garden features. These are covered by your buildings insurance, not your contents. Your insurer will normally work out a quotation based on the number of bedrooms, etc., and your postcode. The insurable figure will be the cost demolition and clearing of the site and re-building your home on the present site, of course.

To help you re-consider the value of your belongings and for additional advice there’s a handy checklist for home owners on the Association of British Insurers, www.abi.org.uk

There are a large number of insurance companies handling both contents and building insurance and, as always, it pays to shop around.

Buying insurance has become a necessity in today’s world. But a good insurance policy doesn’t come cheap. The premiums you pay will increase as you extend the duration of the policy. Hence whole life policies are more expensive than term insurance. This is because a whole life policy covers you for the entire life while a term insurance policy will offer cover only for the term decided while signing up for the policy. A term insurance policy is a cheaper and simpler way to insure your partner’s and your family’s financial future if you die. Here are some useful tips on buying the cheapest term insurance policy.

Why should I buy life insurance?

You should buy term life insurance if you have a mortgage or dependants. In the unfortunate event of death, the insurance will pay off the mortgage, thus providing shelter to your family, who in other circumstances would have been left homeless.

What should the term of my term life insurance be?

The duration of your term insurance should equate the duration of the mortgage. This ensures that if you die, it will clear off your debts so that your family has a roof over its head.

Why should I buy term insurance?

With plenty of insurance policies flooding the market, it becomes confusing for a layman to find out the right policy meeting your needs. Besides, buying complex policies will force you to pay higher premium. Term insurance is a simple and cheap policy that pays a certain amount entirely on your death. As there is no investment factor included in the policy, you do not get anything if you are alive when the policy expires. This means the insurer cannot charge you heavily for this policy, making it the cheapest policy in the market.

How should I buy a term insurance?

Due to progress made in medical science, the quality of our life has increased. This has brought down the cost of insurance premium by 40%. If you are paying the premium at the old rate, negotiate with your insurer or look around for a new one. Get quotes from various insurers before committing yourself. This is because there is a vast amount of difference between various policies. Though you can buy a policy from a physical entity like bank or an insurance broker, internet offers the fastest and simplest way to get the insurance. You can get online quote instantly and understand the premium you will have to pay. Quotes are just an estimation of the premium you will pay. The actual premium will be decided once you have submitted the application form. Insurer will consider various factors like height, weight, age, sex, smoking, presence of diseases and other factors before deciding the premium. If you are unhappy with the premium, you can terminate the policy.