Insurance is often referred to as a ‘grudge purchase’. When one considers that insurance is an item we buy with the hope of never using it, then it is easy to understand the animosity consumers feel about handing their hard-earned money over to insurance companies. However when the unexpected does happen, insurance is vital for cushioning the financial blow that follows. More important than having insurance is having the right kind of insurance. To find affordable insurance that provides the right cover, we have the following tips for people thinking about buying an insurance policy for the first time:
Calculate Your Insurance Needs
It is impossible to go through life risk-free. The unexpected happens no matter what and the only thing you can do to minimize the impact, is to protect yourself financially by purchasing insurance. In order to calculate your insurance needs, you need to establish where most of your risk lies. When you take out a loan for a vehicle or home, many banks insist that you cover possible losses associated with these items before granting the loan. This type of risk is easy to identify as a third party is doing it for you, but do not stop there. If you do not owe money you are still at risk. Think about your health and the health of your family. Do you have enough money to pay for medical treatment out of your pocket to cover a serious disease or injuries from a car accident? Also consider your family’s current lifestyle; if the bread-winner in the family dies, will they be able to continue living the same way? If you are unsure of what type of risks you are exposed to, then it is a good idea to sit down with an insurance professional, like an insurance broker, and thoroughly evaluate your risks and needs.
Once you have identified your risks and needs, it is then time to find insurance that will cover this risk. As with all things, everyone wants the best deal on the market, but finding great deals takes a bit of savvy. You could contact every insurance company out there and get quotes, but this would take many days to do. To save time, you have two options: use a broker or use insurance comparison websites. Insurance comparison sites are extremely convenient to use as they generate comparative insurance quotes almost instantly. However they do have some drawbacks. For one, they do not always compare all the insurance products on the market. Also, some provide inaccurate quotes or even worse they provide no quotes and simply capture your contact details for pushy direct sales teams to abuse. Using an insurance broker is another option. Insurance brokers provide a similar service by aggregating quotes from several insurance companies and suggesting the best deal to their clients. Unfortunately, brokers also come with drawbacks because they are often biased towards insurance companies that provide bigger commissions. The best thing for a first time buyer to do is to use both an insurance broker and comparison websites to get acquainted with the insurance products on the market and then to further research the ones they are interested in on their own, before making a decision.
Understand the Policy
Once you have found an affordable insurance policy you should refrain from purchasing it without making sure that you understand the details contained in the policy. Start by reading through the policy and highlight any terms or clauses that you do not understand. Also make sure that the policy covers the risks that you have already identified and make sure that the policy payout is adequate to cover any losses. Once you have acquainted yourself with the policy, go over the sections that you do not understand with your insurance broker or with the insurance company’s agent. Discuss the policy with friends and family and take note of any problems they may have had with their own insurance policies. Go back and check that the policy you are interested in does not expose you to the same problems. Once you are happy with you’re the policy you have chosen, sign on the dotted line.
Stuart Broad is a marketer who works for a number of South African Online Insurance Quotes sites. If you are looking for a budget insurance, he recommends trying to get House Insurance at InsuranceHound.