The majority of insurance is not compulsory so it is usually entirely up to you whether you need additional cover. Before you buy insurance it is important to make sure you understand your current situation and ask yourself a series of questions about whether you need cover.
Before buying any insurance check what insurance you already have – this includes finding out if it covers everything you need it to cover and that the levels of cover are sufficient. You may find when checking your current insurance that your policy excludes important details or covers you for more than you need or thought you were buying.
Things that are important to consider when buying insurance are available at the following links:
If you have decided that you want to buy insurance it is advisable to “shop around”
Start by getting a few quotes from different companies.
Insurance companies must provide you with key policy information when giving you a quote – this information can be a really useful checklist when comparing other company’s policies. Remember, to compare the cover as well as the price to make sure it covers all that you need.
Also, it is important to bear in mind to always check for exclusions, and always check for charges and fees that may come with the policy.
If you are using a price comparison website, be aware that many large companies are not included, and that many policies may not provide as much cover as you need in an effort to give you the cheapest price and a quick service.
If you are unsure of how to proceed you might want to consult an Insurance Broker. They are experts in the market and can often find you a better deal, although you will have to pay a commission charge.
Follow this link for advice on buying insurance using comparison websites or visit MyAdviceGateway’s page on Choosing Insurance.
It is also important to make sure that the insurance provider is regulated by the Financial Conduct Authority, this means that they will meet certain standards and means they can be trusted - see below.
When you have found an insurer who provides the full cover you need, and have looked around for a better price for the same insurance you are ready to proceed. You will be asked to provide the “full” or “material” facts by your insurer which will allow them to come to a decision about whether to offer you insurance cover and at what price. It is crucial that you disclose everything, however unrelated it may seem, if you fail to respond honestly to questions your policy may be invalidated and your claim can be refused.
Insurance Broker
If you are not familiar with the insurance product you are about to buy consider using an Insurance Broker.
An insurance broker is an expert in the insurance market to provide best advice.and can often find you better cover at a lower price as well as helping you with any claims you may have to make. They receive commission from the insurance provider so you should not have to pay any additional fees on top of the premium.
A guides "When to use an insurance broker", including the advantages of using an Insurance Broker, can be found at the following links:
To help you choose a Insurance Broker click here
It is also important to make sure that the insurance broker is regulated by the Financial Conduct Authority, this means that they will meet certain standards and means they can be trusted - see below.
The Financial Conduct Authority (FCA) is a regulatory body in the United Kingdom that regulates the conduct of financial firms providing services to consumers including the regulation of consumer credit and maintains the integrity of the UK’s financial markets.
The FCA have brought in new rules, known as the Consumer Duty, which set a higher standard of consumer protection in financial services. The Duty means you should get: the support you need, when you need it. communications you understand. products and services that meet your needs and offer fair value.
Further information on the Consumer Duty is available at the following links:
Almost all firms offering financial services in the UK must be authorised byThe Financial Conduct Authority (FCA) .
You should only deal with a financial services firm that is authorised.
If you deal with an authorised firm you will be covered by the Financial Ombudsman Service or the Financial Services Compensation Scheme if things go wrong.
You can check whether a firm is authorised by searching the FCA authorised register.
Alternatively, AdviserBook is an online directory, Financial Advisers and Financial Services companies located in your area.
Unfortunately there are firms that operate without authorisation and some knowingly run scams like share fraud and other investment scams. If you are unsure check the FCA List of unauthorised companies.
To acces a step by step guide to make sure you are dealing with an authorised firm, and to protect yourself from fraud and unauthorised activity click here.
Cancelling Insurance
If after going through all these stages you change your mind, remember you have a 14 day “cooling-off period” in which you can cancel the insurance contract and recover your money. If you’ve bought life insurance, the cooling-off period is 30 days.
If you want to cancel your policy after the cooling-off period you should check your insurance policy. Most insurers will give you a refund if you have not made any claims during the policy year but you will usually have to pay administration fees.
If your circumstances have changed making it much more likely you will make a claim or you have not kept to the terms of the policy your insurer may wish to cancel your policy but in most cases your insurer will wait until the policy needs to be renewed then refuse to renew the policy.
Full details of insurance cancellation can be found at Citizens Advice.
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