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01 October 2023

Insurance issues


By Tim Searle

Tim, I have been reviewing my financial outgoings and in particular my personal insurance costs. It is difficult to determine if I am paying too much for my cover and whether I can decrease my premiums. Moreover, am I adequately covered and getting the most mileage from my insurance buck? How do I find out? – Reginald

Reg, in the offshore insurance market, it remains quite difficult for the consumer to benchmark insurance premiums to determine whether you are receiving a good deal or not.

By contrast, the UK has many websites offering domestic insurance quotes, with the car market dominating the sector. However, these quotes are not available to non-residents.

Regardless, the key to any quote is ensuring you are comparing apples with apples and that the type of cover you seek is ideal for your circumstances now and the foreseeable future.

I appreciate your need to review your costs, particularly as the cost of living continues to increase and economic instability remains. But, whether you are working on your own or working with an independent financial planner, make sure you look at the various options available and get professional quotes from each.

This is the only manner to scrutinise quotes from varying companies in order to get an insight into the variation in costs available.

However, before you start looking at ways to cut expenditure, make sure you are not exposing yourself to unnecessary risks. A typical rule of thumb in insurance is that you get what you pay for: The less you pay, the less cover you get.

Recent research by Zurich shows that Britons, for example, are still reluctant to protect themselves and their families properly. Less than four in 10 Brits (33 per cent) are willing to reduce monthly outgoings to fund some form of family protection despite the global financial situation. The findings show only a third of those married with children (33 per cent) feel critical illness cover is important and less than that (29 per cent) see income protection as important.

The survey also shows that less than two in 10 (13 per cent) feel they need cover because they are in good health, but this is the best time to buy protection, since if you are or have been ill, it may simply not be available.

Bear in mind that if you have advanced in years somewhat or indeed incurred some medical condition, the savings may not be there for you.

Incidentally, for those of you who have stopped smoking as your New Year's resolution, you have now halved your insurance premium.

I would argue that you cannot be over-insured (well I would, wouldn't I!). To support my claim, I can say confidently we have never had a widow or claimant say the payout was too large. Most people are happy to insure their house and its contents, their car, cat, travel plans or mobile phone, with little thought to the income funding their lifestyle.