Insurance: What’s Essential and What’s Desirable?

With household budgets being stretched paper thin, one of the first things to get cut is insurance cover. But which kinds of insurance can’t you do without?InsuranceYou only have to switch on your TV set to be bombarded with sales messages about insurance.Car insurance. Travel insurance. Contents insurance. Pet insurance. Dental insurance. The list goes on…And while there’s no doubting that there’s a good reason to buy most types of insurance, it’s easier said than done in these cash-strapped times.So, to help you make the most of the budget you set aside for insurance, we take a quick look at some of the most common types of insurance and assess whether they’re essential, highly desirable or simply desirable.With luck, our conclusions will help you to tighten up your insurance portfolio and save some money into the bargain.

1. ESSENTIAL INSURANCE

At the very top of the tree, there are two types of insurance you mustn’t be without. You need one to protect your home, and the other to comply with the law.

Buildings insurance

Few people have the money to rebuild or repair their home if it is damaged by fire, storms, lightning, landslip, falling trees, a vehicle collision or other catastrophe.Moreover, if you have a mortgage, you are likely to be required to hold buildings insurance until the loan is repaid. Make sure yours is up to date.

Car insurance

If you drive without holding valid car insurance, you face disqualification, points on your licence and a fine.And now, if you leave an uninsured car in a public place, such as your road, you can be fined – even if you haven’t driven it whilst you’ve been uninsured.Uninsured motorists cost society hundreds of millions of pounds each year, and they push insurance premiums up for the rest of us. Make sure you’re covered at all times.

2. HIGHLY DESIRABLE INSURANCE

If you can afford cover in these categories too, take it – it will give you peace of mind and could save you a fortune.

Contents insurance

Whether contents insurance really belongs in the essential or highly desirable category depends on your circumstances.If you have few possessions, or you are comfortable that you could start again with few belongings, then you might decide not to opt for contents insurance.However, if you have treasured possessions and couldn’t afford to replace them, contents insurance becomes a must.Needless to say, if you own very valuable items such as paintings, silver, antiques or wine you must have high net worth insurance to cover them.

Life insurance

Whether you choose life insurance depends on who you would leave behind if you died.If you have family who would struggle after your death, it’s a responsible plan to make sure your life is insured for their benefit. For similar reasons, it’s worth considering critical illness insurance.

Travel insurance

Before you decide to drop travel insurance from your list, ask yourself whether you could afford medical care if something happened to you, or whether you could absorb the cost of cancelled flights.If you are taking part in high risk activities such as extreme sports, then cutting back on travel insurance cover simply isn’t an option.

Pet insurance

Whether you choose to take out pet insurance will depend on a number of factors such as the species of pet you have, its age and general health – and whether it has any pre-existing conditions.Some insurance companies take the decision out of your hands and refuse to insure older or unwell pets, but there are many good value policies out there that can save you a fortune during your pet’s lifetime.

3. DESIRABLE INSURANCE

These types of insurance may be worth opting for – but weigh up the pros and cons before taking out a policy.

Dental insurance

If you prefer to use a private dentist, or you want to insure yourself against NHS dental costs, then dental insurance could be for you. If you do go ahead, be sure to compare dental insurance with dental plans to get the right cover.

Private medical insurance

If you are ill or need hospital treatment, the NHS is still here for you. But if you want to make sure you are treated quickly or prefer to use private doctors or consultants, it’s worth looking at private medical insurance cover – especially if your healthy lifestyle qualifies you for lower premiums.

Mobile phone insurance

We’re going to end this article by starting an argument.Some people think mobile phone insurance is a waste of time because you can usually claim for you phone on your home insurance. Others think it is helpful because phones are vulnerable items – and having separate insurance protects your no claims bonus on your home insurance.What do you think? And which types of insurance couldn’t you do without? We’d be keen to hear your views.

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