Car Insurance

cause problems: some companies look on a suite as a single item for insurance purposes while others say that it consists of three separate items. The Ombudsman has given the view that a policyholder is not entitled to a new suite just because one chair is damaged. But some insurers will pay for an entire suite to be recovered, while others may give an ex gratia payment (in other words they pay but admit no liability).

How much to insure for

As with buildings cover, don't under-insure your house contents. Go round every room in the house (and outbuildings) and add up what it would cost to replace everything. If you're taking out new-for-old cover, check current prices in the shops.

Make sure your policy is index-linked. If you buy any expensive new items for your home, increase your contents cover as soon as possible don't wait until renewal.

Car insurance

Types of policy and what they cover

Road Traffic Act cover Everyone who owns and drives a car on the public road must by law have at least basic insurance cover. The absolute minimum (sometimes known as Road Traffic Act cover) must cover your liability for injuries to other people, their property, and their cars, caused by the use of your car while it is on a public road.

Third party, fire and theft cover This incorporates the legal minimum and also covers damage to your own car if it is stolen or burnt. However, it gives no cover if your car is damaged in an accident.

Comprehensive cover This type of cover is the most expensive kind because it covers the widest range of risks. As well as third party, fire and theft, it covers you for damage caused to your car by most other means - so accidents are covered (whoever is at fault), as is damage caused by falling trees and suchlike. The contents of your car - rugs, clothing, carrycot or whatever - are also covered, but there is usually an overall limit. Some policies include extras like paying for your car to be towed away after an accident.

For more information about Pensions

House Contents Insurance Continued

The best choice of house contents insurance for most people is a standard new-for-old policy, with an all-risks extension for possessions regularly taken out of the house.

What influences cost?

The main influence is where you live. Insurers divide the country into areas of higher and lower risk according to their experience of paying out on claims. Busy urban areas where the chance of theft is greater attract the highest premiums, quiet rural areas the lowest.

Points to note

- If you live in a 'high risk' area where theft is a fairly common occurrence and... see: House Contents Insurance Continued

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