4 top insurance tips for the new year

As the credit crunch dips into a full on recession, choosing the right insurance cover becomes more important than ever. So today Insurance News Blog offers you 4 top insurance tips for the new year.

1. Avoid payment protection insurance
Number one in any list. Although banks and loan companies often try to force payment protection insurance (PPI) on customers taking out loans, they hide the true cost and fail to make it clear to their customers that taking out their cover is not mandatory. Lenders' PPI is usually vastly overpriced, and if you shop around you can always get a better deal.

2. Get your gadgets insured
Crime tends to go up in a recession, especially street crime so it's best to make sure all your desirable gadgets are covered.

Rather than insuring them separately get them added to your home contents policy. If you've acquired more gadgets over Christmas ensure that you are covered for the full amount.

3. Review your critical illness cover
Check whether the terms and conditions have changed, and whether it's still worth having.

In recent years these policies have become more and more expensive and with more exclusions. Insurers are also using unsavoury methods to avoid paying out. You might find permanent health insurance or an income protection policy actually represent better value.

4. Car breakdown cover
Especially in winter motor breakdown cover is a must. Make sure it includes at least these basic features: tow to garage, fix at roadside, take you and your passengers home, fix at home, and car hire or accommodation if your car cannot be fixed.

The following options are also desirable if offered: cover whilst driving on the continent, recovery for accident, theft or vandalism, and provision of a relief driver.

Tax cuts will help ailing insurers

The Association of British Insurers (ABI) insists that the proposed reduction in VAT from 17.5% to 15% will save the insurance industry at least £70m a year. As many insurers have been struggling in the hostile financial climate this could make all the difference to troubled companies.

The ABI stated that in 2007 the insurance industry was hit by £495m in irrecoverable VAT costs; if VAT was cut to 15% this figure would have been reduced to only £424m.

With so many institutions struggling to stay afloat during the current economic crisis caused by the credit crunch, this move may be enough to save jobs and keep premiums down.

Home insurance for beginners

The Times has a great beginner's guide to home insurance. There are two main types of home insurance; building and contents.

For those of you too lazy to read the article here are some brief highlights:

Building insurance

• Most lenders insist that you have this before offering a home loan.
• Protects the bricks and mortar of your property plus permanent fixtures like fitted kitchens and bathrooms.
• Also covers garages, greenhouses and sheds, but not usually boundary walls, fences and driveways.
• Protects a home from fire and damage by third parties.
• Not all policies cover storm and flood damage, burst pipes, water leakage and subsidence.
  Based on cost of rebuilding a property rather than its market value.
• Most policies will provide you with alternative accommodation should your home become uninhabitable.
  

Contents insurance

• Not compulsory, but advisable.
• Protects your possessions - anything from electronic goods, furniture and jewellery, to sports equipment and the food in your freezer. Increasingly, garden plants and tools are insurable too.
• Covers fire and third party damage, as well as theft, but may not pay out for damage caused by storms, flooding, frozen pipes and other leakages.
• Some policies cover legal costs should you or someone else sustain injury in your home or if you have a dispute with your neighbour.

7 key tips to keep in mind when buying travel insurance

If you're thinking about booking a trip abroad then, in these times of folding airlines and disappearing travel companies, you'll need the peace of mind insurance brings.

Keep these tips in mind before you part with your cash and you won't go wrong:

1. Before buying travel insurance through your airline or tour operator check that you can't get a better deal from a specialist offering a higher level of cover for less money.
2. If you go abroad more than once a year annual insurance may be a better option than a single trip policy.
3. Make sure your policy includes at least £1 million worth of medical cover in Europe (£2 million outside Europe), and personal liability of at least £1 million.
4. Check that there's a 24-hour emergency helpline.
5. Declare any existing medical conditions or risk invalidating your cover when you need it most.
6. Make sure your cancellation and curtailment cover are enough to reimburse you for the cost of your holiday.
7. Check the small print for exclusion clauses and excess amounts.