FOOL'S EYE VIEW
Simple Tips For Saving On Insurance

By Maynard Paton (TMFMayn)
May 8, 2002

Don't press the back button just yet! Although insurance has a reputation of being mundane, there's every chance a bit of research can save you money. Fresh from paying for home and travel insurance recently, here's my straightforward advice.

Shop around

An obvious starting point, but how many people bother to look round for a better quote? Me? Hardly ever.

You know how it is. The renewal form comes through the door, you've got a fortnight before the cover expires, and well... you've got better things to do than hunt for an better deal. It's just so easy to renew through your existing insurer.

When I bought my house a few years ago, the last thing on my mind was getting a competitive buildings and contents insurance deal. I just took the mortgage lender's offer. At the moment, my buildings and contents insurance is £18.97 a month. But my first enquiry, via a link in our Insurance Centre (shameless plug), has quoted me an annual premium of £153.20. Of course, there may be differences between in terms of excess payments and the extent of cover and so on, but a £75 per year reduction shows the scope of the possible savings.

Then there's travel insurance. If, like me, you're too busy thinking about hotels, flight times and sun block when venturing into the travel agents, then a bad deal with travel insurance is probably on the cards.

For instance, I've recently booked a week's holiday in the US. For this trip for two, a popular High Street travel agent nearly charged me £114 for their insurance package. I say nearly, because luckily for me, the agent was offering a special half-price insurance deal when I made the booking. But for next time, I won't leave things to chance. A comparable travel insurance quote was £57.75. (In fact, quotes for annual cover are generally more favourable than single trip deals for the frequent fliers amongst you.)

Furthermore, my general inertia looks to be costing me with my boiler. For the sake of £49 per year, taking out cover to avoid waiting with no heating in the depths of winter for a busy (and hopefully, cheap and suitable) local boilerman to turn up looked a good deal. However, the price of having a prompt repair and the insurer footing the bill has rocketed. The latest renewal premium is £84. Time to shop around, if I get the time...

Hidden extras

As well as shopping around, there's another simple way of reducing your insurance burden: read your existing policies. Although my home insurance doesn't cover boiler problems, it does cover many other domestic troubles for which specific insurance is offered by many other companies.

For instance, every water bill I receive is accompanied by an invitation to sign up for a plumbing and drainage protection scheme. However, there's a certain amount of overlap with my household insurance. It too offers a similar, but a little less comprehensive, plumbing emergency service. My existing policy also covers damage and repairs to water and sewer pipes. I've been tempted in the past with the water company's £50 per year offer for cover. But it's become less appealing after I began to read the smallprint in my existing policy.

Indeed, after studying my home insurance policy, I found that I could also claim:

* 'Financial loss following misuse anywhere in the world of credit cards belonging to you or your family';
* 'If any named insured dies within 60 days as a direct result of an accident while travelling within the British Isles as a fare-paying passenger in any road or rail vehicle';
* 'Expense and loss of earnings arising from service as a juror by you or your spouse for any period in excess of two weeks', and;
* 'Sums which you have been awarded by a court in the British Isles and which still remain outstanding three months after the award has been made'.

I've discovered that my credit card has a handful of free 'hidden' benefits, too:

* 100-day purchase protection for theft and accidental damage;
* Travel accident insurance of up £100,000, and;
* Travel inconvenience insurance of up to £750.

Appropriate cover

For all the talk of shopping around and looking for those 'extras', you have to ensure you don't miss the big picture and leave yourself underinsured.

There's nothing worse than falling ill abroad when you have inadequate medical cover. Not much better is finding you're insured third-party when driving an unfamiliar hire car on the wrong side of the road. And when was the last time you considered the cost of rebuilding your home should a chip pan fire burn it to the ground? The Association of British Insurers has a handy little guide for making rebuild calculations here. Finally, there's content insurance. My claim limit is £7,500. Enough to compensate for the entire loss of carpets, sofas, televisions, beds, books, videos, limited edition Fool T-shirts and the rest? Probably not.

For more information on all types of insurnance - Visit The Motley Fool's Insurance Centre