Insurance Basic Rules

There are a few general rules to bear in mind when considering insurance. They may prevent your being out of pocket or getting locked into a dispute with your insurance company when you make a claim.

- Get quotes from several different companies. A broker can save you some leg-work.

- Never choose an insurance company just because its policies seem cheap. Check that the cover meets your needs and use surveys such as those in Which? magazine to see how people who've used the company rate its service.

- Never rely on just a brochure for details of the cover. Ask for a copy of the policy.

- Always read the policy before you buy. Ask the company (or your insurance adviser) to explain anything you're unclear about.

- Make sure you understand phrases such as 'all in' and `all risks'. Some policies cover only what's actually listed on your policy, others list only what's excluded.

- Watch out for policy 'excesses'. An excess is the first part of any claim which you must pay yourself - insurers use them to discourage small claims. For example, if your policy has a £400 excess, then you'll have to pay the first £400 yourself on claim>


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What Insurance Does

The aim of insurance is to compensate you following a loss so that you're as well off - but no better off - than you were before the loss occurred. The exception is life insurance (often called assurance); since a value can't be put on human life, it's up to you to decide how much cover you want.

An insurance policy is a contract and your rights as policyholder depend entirely on what is written in it and on any endorsements which may be tacked on. You can choose different companies and policies, but you have very little chance of influencing the terms of a particular contract. For the... see: What Insurance Does


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