A New Year’s resolution to get fit? You may want to consider getting financially fit as well.
At this time of year, we think about gyms, diets and smoothies. Yet we could be losing thousands of pounds a year without realising it.
The facts are stark – the average Briton will have put on 2.7kg over the Christmas period. That’s why the three most popular New Year’s resolutions in the UK – by far – are lose weight, exercise more and eat healthily. All admirable aims, but what about other areas of our lives where we could do with a bit of a spring clean?
NOT ONE of the UK’s top ten resolutions is about personal finance. Even at a time of year when we look ahead and try to improve ourselves, is personal finance really that boring, complicated or just plain intimidating that we can’t face it? Is it so tedious that we would rather try to give up smoking (ninth on the list)?
By shopping around, British households could save up to nearly £400 a year – the price of an annual gym membership for some. This means that adding just one more New Year’s resolution to your list you could pay for the first three at little or no extra cost. Remember those news items that were called “boring but important”? This is one of those.
So what should you look out for when reviewing your insurance cover?
- Do you need cover at all?
This is a two-part question. First, are you not buying insurance when you should be? Almost one in four travellers go abroad without any travel insurance, thinking that they simply don’t need it or can’t be bothered. And within certain groups, the figures are even more stark – the LGBT community is fifty percent more likely to have no travel insurance at all.
Even if you have insurance, is it right for your needs? Many of the free travel policies offered by banks, for example, only cover UK or European travel, and if you have a pre-existing medical condition it will not be covered unless the insurer has been notified (and the customer has paid any required additional premium). Always check what cover you have, particularly in free or linked policies.
- Is it all about price?
The answer is no – look at the coverage offered for that price. “Price comparison” websites do just that – they compare mainly just price, and it’s difficult to see anything other than headline coverage levels, but the details may vary wildly. Don’t expect a £30 policy to give you the same cover as a £100 policy. Shopping around may save you a few pounds if your existing insurer has increased their prices. It all depends on your own individual requirements.
Many insurers will increase their premiums year-on-year to benefit from customer inertia in changing providers. Under new regulations from early last year, insurers must now tell you when you renew what last year’s premium was. This will show you if they have increased their premium, as many of us simply don’t remember. If your renewal letter does not show last year’s premium, then the insurer is breaching regulations and can be reported.
- Is ‘one size fits all’ right for you?
One of the biggest problems with any insurance policy is that they are often designed around a single model, a family with father, mother and children. This can become apparent, for example, in wedding insurance wording that refers only to ‘bride and groom’ (to the exclusion of same-sex couples), or travel policies that don’t offer pricing for single parent families.
A good insurer should ensure that all customers are correctly and efficiently covered, not just those it perceives as the norm. If you fall outside the ‘mother-father-two kids’ model (which in any case is now less than 18% of the UK population), then it’s worth checking that your particular circumstances are covered.
Looking forward, it’s worth spending an afternoon looking at your insurances to see if you have the right cover, at the best price. If you find you are being overcharged, many insurers will offer a pro-rata rebate if you cancel and move elsewhere (although do check before cancelling). And if you don’t fit the traditional ‘2.2 kids’ model of a family, then check that your policy gives you the right cover – or go with an insurance provider that has already thought about that (mentioning no names!).
Have a wonderful 2018, and make sure that you get not just fit, but financially fit.