Do you have too much insurance cover?

“For example, if you lost your mobile phone you would not be able to claim more than the value of the item by making a claim on a specialist phone policy as well as on your home insurance. Some policies will have an exception clause stating that if you have other insurance on the item they will not consider a claim, or they will look to share the claim costs with the other policies in place.”

This can slow down a claim if the insurers need to talk to each other, and are both trying to get the other one to pay out.

With this in mind, try this checklist of some of the areas where you may have duplicate cover. Defaqto calculated that households could save up to an average £260 a year – simply by removing unnecessary insurance.

Customers with packaged bank accounts are the most likely to be doubling up on cover, so it is important to know exactly what you are paying for with these premium accounts. Most offer a bundle of insurance products for your monthly fee, but do check the terms carefully, as they may not be tailored to your requirements.

Motor insurance and breakdown cover

Many of us buy separate car breakdown cover, such as membership of the AA, RAC, Green Flag or Auto Aid. However, it is worth checking that you do not already have this elsewhere. Most packaged bank accounts, where you pay a monthly fee, include breakdown cover as a perk.

But the level of cover may vary: check, for example, whether the cover with your packaged account offers Home Start, if you want to be able to call someone to your house if your car won’t start. If it doesn’t include it, you may want to buy the extra cover.

If your packaged account is not offering deals that suit you, try to find one that does. Many banks, such as Lloyds, have a tiered selection of packaged accounts that offer different benefits. Or cancel the account altogether – it is often cheaper to get the products you need separately.

Also, double-check that your car insurance deal does not already offer breakdown cover.

Home insurance

Your home insurance

may cover more than you think. For example, it may include loss or theft of your mobile phone, or legal expenses. The latter allows you to take legal action if you are in an accident, face unfair dismissal from work or find yourself in disputes with neighbours, for example.

This is sometimes sold as an add on, or it may be included for free. Before you take it out, if there is a cost, check whether you are a member of a professional body or union that would help with similar disputes.

You may also be tempted to buy home emergency cover, or boiler and heating cover as stand-alone policies. These offer helplines and call-outs in the case of emergencies or breakdown. However, check that this isn’t covered as part of your home insurance. Sometimes it is included as standard; if it isn’t, you may be able to add it to your home policy for less than the cost of taking out a stand-alone policy.

Travel insurance

Before you pay for expensive baggage cover, which can bump up the cost of travel insurance, check whether your bags can be covered on your home insurance policy. Again, this can be a cheaper option, and may also provide cover if, say, your handbag is lost or stolen in the UK.

Remember, if you buy travel tickets with a credit card, this provides free insurance in case your airline goes bust under a clause called Section 75. This means that the credit card issuer is jointly liable for delivering the product you have bought.

Gadget or mobile phone cover

As mobile handsets get more expensive, insuring them becomes more important. It is also an issue because, if someone steals your phone and runs up a large bill, you are liable for it until you have reported the phone missing.

This type of cover is commonly included within a packaged bank account, so check, if you have one, whether separate insurance is needed.

Some insurance elements, such as lost or damaged handsets, might be covered under your home insurance, too – so check the small print.

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Category: Auto Insurance

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