Cancelling Or Not Renewing Your Policy
Is it time to renew one of your insurance policies and you notice from the documents that the insurance company has sent you that the cost of your premiums has gone up? Perhaps money is a bit tight at that time too and you are therefore tempted not to renew your insurance cover? If this is the case, stop and think!
Ultimately it is your choice whether to cancel or renew an insurance policy, but if you are considering cancelling or not renewing one think about the risks that you are taking and whether or not you could manage financially if anything happened and you were not covered.
The average home now contains over £40,000 worth of gadgets, electronic items, clothing and furniture. Consider whether you would you be able to replace your possessions if you were a victim of a burglary or a flood or fire.
With a contents insurance policy, make sure that you spend time accurately calculating the value of your personal possessions. Do not be tempted to under-insure your contents. If you insure your contents for £15,000 and they are actually worth nearer to £30,000, the insurer would only be obliged to pay out half of what you have claimed for.
With cover such as motor insurance, do not accept your renewal quote without first shopping around. You can use price comparison websites, but try to use more than one.
If you get a better offer from another insurer or broker, go back and ask your current insurer if they can match it or beat it. Also, review your current level of cover to see if it is still right for you. For example, if your car has gone down in value over the years think about whether it is still worth buying comprehensive insurance cover.
With life insurance, the older you are when you start a policy the more expensive it will be, so always bear this in mind if you are planning to cancel or decide not to renew a life policy.
Tips to help you cut the cost of insurance
Whatever the type of insurance policy, there are some simple steps and choices that you can take that can help you to save money whilst still being adequately covered:
- Always shop around. Make sure that you compare like with like to find the best deal that you can for your circumstances.
- Review your level of cover - you may be able to get a lower level of cover for a smaller premium. Talk to your insurer to see what they can do for you. Do not be persuaded solely by cost, make sure that the insurance cover still meets your needs.
- Check any benefits package that your employer may provide. They may well include certain types of insurance, such as private medical, life or permanent health insurance. You may also be able to include your partner and children on some of the policies, so make sure that you check this before buying separate policies.
- Try to avoid doubling up. Check that you are not covered for the same thing by another insurance policy or as part of a bank account package.
- Consider increasing the excess amount that would be payable. Ask your insurer whether increasing the excess you would have to pay if something happened might cut your premiums. Remember to make sure that you could afford the excess in the event of having to make a claim.
- Improve security around your home. Spending a little money on window locks or a burglar alarm may well help to bring down your premiums.
You could also consider self-insuring. Instead of paying a premium to an insurance company, put some money away (for example in a bank account) instead. This is often good for relatively inexpensive insurance, such as for mobile phones. If you put £5 away every month you can use this to buy a new phone if yours is lost, stolen or damaged, and if you do not use it the money is still there. The downside of this is that if there is not much money in there to start with, so if you need to ‘claim’ in the first few months, there may not be enough to cover any loss.