This piece first appeared in Good Homes in August 2009
The text here may not be identical to the published text

Protect against insurance

Insurance can be good. Some can be essential. But a lot of it is a waste of money.

The annual survey of what we spend by the Office for National Statistics shows that nearly a quarter of us do not insure the contents of our home. But even more of us think we are insured but in fact have too little cover. That means we will get only a proportion back if we are burgled. Make sure your policy covers all your stuff especially valuables you carry with you, including abroad.

Life insurance is often sold to people who do not need it. If you have young children or a financially dependent partner or a joint mortgage then it is essential. But otherwise there is no point.

Oversold with life cover is critical illness insurance. But it is generally an expensive way to protect yourself against the unlikely occurrence of heart disease or cancer. Most illnesses are excluded and premiums are now very high.

Payment protection insurance sold with a loan or a credit card is always expesnive. It pays a limited amount off your debt for a fixed time if you fall ill or are made redundant, though not if that happens soon after taking it out. Never buy the PPI offered with a loan.If you really want it, go to an independent website and find a low priced product.

Also oversold with credit cards is insurance against losing your card. The bank pays any loss so what is the point? None.

Extended warranties are in fact insurance and generally a waste of money. Electrical goods are reliable and cheap to replace. If they do go wrong then consumer law allows you to get your money back for at least a year and some shops and manufacturer guarantee them for longer than that.


All material on these pages is © Paul Lewis 2009