Buying insurance

There are three main categories of insurance which cover your house, your car and your life. There are hundreds of different policies available and you need to shop around for the best deals.

Household insurance
The cost of household insurance will depend on a number of different factors including the size and type of your property and your postcode. Discounts may be given if you belong to a Neighbourhood Watch scheme or have security devices such as alarms.

There are two types of cover; buildings and contents insurance.

Buildings insurance covers the structure of your home including fixtures and fittings and insures it against damage by fire, storms, flood and subsidence. This type of insurance is mandatory if you have a mortgage and the largest amount you can claim against your buildings insurance is the cost of replacing the entire structure.

Your contents insurance covers you for loss or damage to the furniture and other possessions in your home. The majority of policies provide for replacing old for a new equivalent. It is sometimes possible to extend your policy and pay extra to cover damage or loss to individual items such as computers or valuable pieces of jewellery outside, as well as inside, the home.

Many home insurance companies offer extra discounts and incentives if you buy buildings and contents insurance together or buy online .

Motor insurance
It is illegal to drive any kind of vehicle in the UK without motor insurance. The amount that you pay will depend on your age, the type of vehicle and engine size, where you live and occasionally, your job. Women sometimes get cheaper motor insurance as do those who do not have other named drivers on their insurance, have not made a claim against insurance or are willing to accept a higher excess.

Third party only is the minimum level of insurance required for drivers. This covers your legal liability for injuring other people or damaging their vehicle.

Third party fire and theft is the same as third party insurance but also includes cover for loss or damage to your car if it is stolen or damaged by fire.

Comprehensive is the most expensive type of motor insurance and protects you against accidental damage to your car as well.

Life insurance
You need to take out life insurance if you have dependents e.g. children, who you wish to be secure financially in the event of your death. What you pay will depend on factors such s your age, state of health, sex, whether or not you smoke and any previous serious illnesses or medical conditions.

Term assurance is ideal for those if finance after divorce is tight. It is cheap and simple and pays out a fixed amount of money (the sum that is ‘assured’) if you die within a specified period but nothing if you live beyond that term. It provides useful cover for the period of a mortgage or until your children are grown up for...

The need for insurance

Thinking about insurance is boring but necessary but try to think of it as a security blanket, something slightly cuddly that should make you sleep better at night in your new life after divorce..

Because unexpected and unpleasant things can happen when you least expect them to, you need the peace of mind that insurance can bring. Being divorced means that you only have one salary or income stream coming in to cover eventualities and if you fail to take out adequate cover then you could find yourself facing a hefty bill that you may be unable to pay, or not being able to meet your mortgage repayments if you fall ill.

Most of us are concerned with three major areas when it comes to taking out insurance – that relating to our house, our car and our life. If you have just been divorced you will have dozens of other things to think about but don’t ignore getting, and keeping, yourself adequately covered.

Is insurance really necessary?
Insurance will help you protect yourself and your belongings against unforeseen, unfortunate events and the insurance company will pay an agreed amount to cover any damage. In some cases insurance is an option such as that for house contents and it is up to you if you are willing to take a chance that your home may not be burgled or subject to damage from a leaking washing machine for example. Some insurance, such as motor insurance is not optional.

Insurance companies will assess the amount of money – the premium - you need to pay for a particular type of insurance on the information you give them such as where you live or your age and the type of insurance you require.

It is important that you give the correct information when buying insurance as giving the wrong information could affect any claim you might make.

Most insurance policies specify an excess. For example; if you are making a claim for three hundred pounds you pay the first £50 and the insurance company will pay the remaining £250. The excess amount will vary with different policies.

How long does insurance last?
Most but not all insurance will give you cover for a year at a time and you have the option to renew it at the end of the period or go to another company that is offering a better deal. If you switch insurance company check that what is being offered is adequate for your needs. Cheaper does not necessarily equate to better or even as good as.

The FSA (Financial Services Authority - fsa.gov.uk ), generally, but not always, regulates firms selling insurance and those providing the cover i.e. underwriting the risk. Exceptions include travel agents selling insurance to travellers. Before you hand over money to anyone involved in selling or underwriting insurance you might want to check that they are on the FSA register. If a company is not registered and something goes awry you will not have access to complaints and compensa...