HOUSEHOLD FINANCES Our expert

How to choose theright INSURANCE POLICIES

Editor of TheMoneyEdit.com, Kalpana Fitzpatrick gives her expert advice on the insurance policies you should keep and cancel

Before you decide to get rid any of your insurance policies, it’s important to consider which ones will make you financially stronger and which you can do without.

Our money expert, Kalpana Fitzpatrick, discusses the cover we all should have.

Home insurance

If you’re a homeowner, legally you need buildings insurance as a condition of your mortgage. Contents insurance is optional, but before you decide to forgo it, consider how much it would cost to replace your possessions if there was a burglary, fire or accidental damage. If you’re renting, then it’s still important to protect your possessions, although you will not need building insurance – that is the landlord’s responsibility.

Life insurance

If you have dependents, such as children or a partner, who rely on your income, then life insurance makes good sense. If you get seriously ill or die, a life insurance policy will pay out a tax-free cash lump sum to your loved ones. No one wants to think about dying, but it could be the most important insurance to take out, to give your family financial security.

Pet insurance

When millions of people started working from home or were furloughed last year, pet acquisition soared, with an estimated 44% of UK households now owning a pet, according to the RSPCA. Yet millions of cats and dogs are uninsured, leaving owners liable for high vet bills if their furry friend needs treatment.

Surgery for a cat’s broken tibia, for example, can set you back by nearly £2,000 and treatment for a dog with diabetes may cost around £1,200 over a two and half year period*. The cost of the insurance policy may depend on your pet, its age and the type of cover you want, but the average premium is around £145** a year.

Travel insurance

If you’re going away, whether that’s abroad or having a staycation, this insurance is a must. It can protect you against lost items, cancellation as well as medical treatment costs abroad. Travel insurance may cost as little as the price of a family meal, but should you need an air ambulance from Majorca, you could face a bill of more than £25,000.

The insurance you don’t need

A salesperson might try to convince you that you need a warranty but your purchase will have a manufacturer’s guarantee and you’re also protected under the Consumers Rights Act 2015, meaning your product must be of satisfactory quality and fit for purpose. If you have contents insurance, your mobile phone should be covered and if you have a packaged bank account (such as Virgin Money), you may already have device cover.

Insurance

CHECKLIST

Always be honest when you are buying insurance, otherwise your policy could be invalidated.

The cheapest policy may not always be the best one for you – make sure you buy the level of cover you need.

You can buy insurance policies using comparison sites, but it is worth getting direct quotes from the company for the best price.

For insurance, such as car and home, note down the expiry date and shop around for a new deal before it ends, as auto-renewal prices are not always the best.