Insurance is something you buy to protect or cover yourself against unanticipated financial loss. This can result from pretty much any unexpected event, such as injury to yourself or someone else, illness or damage to your property or personal possessions.
There are many types of different insurance cover and you may need to take out several policies to make sure you're covered for all the risks in your life.
Typical insurance policies you may come across include:
- motor insurance
- household contents insurance
- buildings insurance
- critical illness insurance
- travel insurance
- private health insurance
- life insurance (often called life assurance)
Some insurance policies are compulsory – so you must have motor insurance if you drive a vehicle, or you may not be able to take out a mortgage without having buildings insurance.
Other insurance is optional but well worth considering. For example, if you're going on holiday, you should always consider taking out travel insurance.
However, if you do have extra insurance, it's always worth checking what it covers and whether it's suitable for your needs.
You can buy insurance:
- direct from an insurer
- through a bank, building society, travel agent, or high street retailer
- through a comparison website
- through an insurance agent
- through an insurance broker or an Independent Financial Adviser. This is definitely worth considering if you want insurance for something special or need advice about the best policy for you.
Once you have decided you want insurance, it's a good idea to get a few quotes from different companies. It's important to compare like-with-like and not go with price alone.
A cheaper quote may mean there are more exclusions or a higher excess. Exclusions are things for which you're not covered, and the excess is the amount of money you will have to pay towards the claim.
Insurers should give you a summary document with key facts about the insurance cover you’re thinking of taking out. This will help you to compare prices and the level of cover between different insurers.
Firms selling insurance have to be regulated by the Financial Conduct Authority (FCA) which ensures the firm has to meet certain standards. You should make sure your insurer is authorised by the FCA before committing to buy.
Approved money advisers can also talk you through the options or contact:
website can provide more help and advice on insurance products
Take our financial education insurance module to help you learn about insurance.