Avoiding Insurance You Don't Need
While Australians struggle with rising prices, the insurance industry is booming. So how do you go about taking some of that profit back from the insurance company and putting it in your pocket? It's simple-make sure you're not over-insured.
It's easy these days to take on insurance that you don't really need. Perhaps you over-estimated your needs, or you didn't read the fine print on your policy. In any case, here are five simple steps you can take to avoid paying out more than you truly need to insurance companies.
- Review your policies every year. There are things
that may change throughout the year that you're still paying to cover.
For example, with home insurance, you may have sold items that reduce
the amount of money you need to claim in the event of a total loss.
With your health insurance policy you may have changed needs as well.
For example, perhaps your children have reached the age where they are
no longer covered. Or perhaps you qualify for a package that excludes
services you won't need until you're much older, like cataract surgery.
These little changes can add up to a considerable savings.
- Review new package schemes carefully. Insurance companies
often offer packages of insurance directed toward certain groups of
people. This can be beneficial because the packaging takes out the confusing
and frustrating aspects of finding a policy that covers your individual
needs. Unfortunately, packages can also insure you for items that you
don't need covered, resulting in unnecessary cost. To make sure you
end up with the right options, read the fine print offered in the package.
Review what's covered and what's excluded to make an informed decision
before signing on the dotted line.
- Assess involved risk. Because insurance companies
make their money by insuring the risk you or your business presents,
you can decrease how much you pay them by assessing risk in the first
place. For example, if you own wish to own a small business, consider
renting in an area that's flood-free so you don't have to purchase flood
insurance. By modifying or, in this case, eliminating the risk completely,
you avoid paying premiums on another insurance policy.
- Be clear about your needs. Knowing what you need
for insurance will help you to get the policy that is right for you
without saddling you with coverage you don't need. If you own a small
business, knowing the amount you need to be insured for will help avoid
over-insuring. It's important to know how much you'll need to rebuild
in the event of total loss, how much liability you'll need, and what
policies you'll need to cover the excesses.
- Seek professional advice. Insurance policies can be confusing and frustrating. There are so many different policies that cover one aspect but not another that it's easy to see how someone could be over-insured. If you're confused, don't be afraid to seek out someone that knows the business. An insurance broker is someone that has direct contact with many insurance companies offering the policies that you need. The broker will be able to take your needs to the companies and then compare and contrast the different policies to find the best policy at the cheapest price, without all the extra cover you'll never use.
Additional Reading:
Should I Take Out Private Health Insurance?
Do You Need a Home Contents List For Home & Contents Insurance?
Should I Take Out Travel Insurance?
Questions To Ask Your Insurance Broker
Six Golden Rules to Lowering Insurance Premiums
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