Insurance

An insurance policy is an agreement made between you - the policyholder - and the insurer. Your contract details depend on the risks you want to avoid and the level of protection offered.

As a prospective customer, your insurer should lay all the basics of your policy out on the table. It would be wise to take note of the:

• different cover levels
• insured and uninsured items
• policy term
• premium quote
• deductible

Think of insurance as a backup plan. If something were to happen, you can rest assured that there'd be funds to help cover your expenses.

Not every accident is your fault. Insurance can help your family pick up the pieces after unexpected mishaps. As long as you pay the premiums, your policy guarantees some financial security when you make a claim.

That's what we call risk management.

Have you ever wondered why your insurance provider offers so many different policies? People have different needs - that's why we compartmentalise. It makes sense not to claim for all incidents under a single plan.

Companies typically group coverage options under one of the following headings:

• Home Insurance
• Health Insurance
• Life Insurance
• Car insurance
• Travel insurance

Some of these can get even more specific. Motor insurance, for instance, can branch out based on your type of vehicle. Accident cover and gap insurance help if you get injured, or your vehicle gets written off.

Other, less common plans also exist to help with pet issues and funeral expenses.

Getting insurance isn't just about covering your bases. Sure, you'd want to confirm that your family can manage all the bills after a car accident. Yet, your insurance company can help with much more.

A solid policy can propel you into:

• Homeownership, assisting with certain property repairs
• Entrepreneurship, providing cover for both employers and staff
• Safe driving, protecting against third party fire and theft
• Improved health care, covering a percentage of medical and dental bills
• Peace of mind, promising financial help for your family after your death

Here are the main drawbacks:

• Policies aren't exhaustive. Home insurance will cover fire expenses but not flood damage.
• Car insurance premiums depend on your credit score. A bad score might increase your renewal price.
• Car insurance companies get biased quotes from black box devices. Mileage isn't always a great gauge.
• Red tape often delays compensation from an insurer.
• Health and car insurance groups get fewer term benefits.
• Comprehensive insurance offers a lower premium but higher deductibles.

If you aren't satisfied with your level of cover, a better plan might be available from our list for less money. One quote can make a significant difference.