Skipping Insurance

leiela

Ok so i have a whole ton of insurances i pay for monthly, insurance for this, insurance for that and in total it amounts up to a whole host of cash leaving my account every month.

This is all well and dandy, i always think it's better to have something insured than be stuck if it breaks.

However over that last few years we'd have several major things go wrong in the house only to find out that for one reason or another the insurance has managed to wriggle out of paying up.

We have boiler and pipe insurance, our boiler burst but they would pay out because of the location of the leak!!!!

We have electric's and central heating insurance, but when the themostate burnt out niether company would pay up, electric company said they only insure the wiring and the box was external, and the central heating people said they only cover the boiler etc not the external wiring/box... gah.

Washing machine broke down 2 days out of warrenty (isn't that alway the way?)

just to name a few examples.

Anyway i looked at my accounts and im paying £300 a month in "none essential insurance" (ie ones you don't have to pay by law car/house etc) Im sure i don't claim £300 back per year never mind per month.

Anyway i was wondering, do you think setting up a savings account to cover these things would be a better idea?? surely if i put the £300 a month away into an account, only using it for "emergancy breakages" it would always be there, i wouldn't find a loop hole to wriggle out of paying myself??

I dunno what do you think, it just seems every damn thing in my house is covered and i never see any of that money come back to me when things do go wrong.

lisyloo

The advanatges of "self insurance" are

1) saves money as you are not paying for admin or profit of some company, so with "average luck" you should be quids in
2) You ar arbiter of your own claims, so no turned down claims and you can payout immediately

disadvantages are

1) The bill is bigger than your fund
2) You might be more unlucky than average

A compromise is to insure only for those things that are legally required (car insurance) or you cannot afford to pay for (house burning down) but for all things you can afford out of your pocket, then don't buy insurance and save up
.
Personally I don't follow this strictly because there is a "peace of mind" element with insurance that I don't mind paying for in some cases.

dunstonh

I never buy insurance on goods and choose to self insure on them. When you look at the cost of covering your cooker, fridge, washing machine, dishwasher, dryer etc then you soon realise that the cost of all these can buy a replacement or two in the 3 or 5 years they cover.

That said, I do pay for central heating cover with British Gas. However, thats because I have a pottertons boiler which is well known for breaking down (many internet pages on that brand and model). In 10 years it has had four circuit boards and loads of replacement parts at no cost to me other than the insurance. Plus, it gets the annual service. Its probably not far from break even or I may be a few pence in but I think its worth it.

Insurance is about making a judgement call and weighing up what is worth covering and what isnt and what the consequences will be if you suffer a claimable event or not.

System

im thinking of not insuring our house contents this year still a bit undecided.

lisyloo

That's quite a brave decision in view of the fact that it could all go at once in fire or flood (small chance I know).
Perhaps you could lok at the options you have e.g. freezer cover, legal, personal possessions, acidental damage and cut back on the options but keep the basic cover.

shelly

leiela wrote: »

Anyway i looked at my accounts and im paying £300 a month in "none essential insurance" (ie ones you don't have to pay by law car/house etc) Im sure i don't claim £300 back per year never mind per month.

Last time I looked car insurance was a legal requirement


We don't have insurances for anything in our house other than basic buildings and contents (no accidental damage or any named items at all)

lisyloo

Last time I looked car insurance was a legal requirement

Specifically third party cover is a legal requirement.

Fire, theft, fully comp, legal cover, NCD protection, hire car, recovery etc. are not a legal requirement so for many people there are options to cut down if required.

Building insurance is usually a condition of a mortgage which is a contractual requirement but not a statutory one.

koexelek

CHRISSYG wrote: »

im thinking of not insuring our house contents this year still a bit undecided.

I am quite supersticious about this sort of thing.
I tend to think that if I insure something I will never have to claim, but as soon as I cancel it , I would probably need to.

leiela

Yes sorry i wasn't clear.

what i ment was that im thinking of scrapping everything BUT essential legally required insurance, so in my case that would mean i need to keep my home insurance and my car insurance but could scrap everything else.

right now practically everything in the damn house is insured, cooker, tv, fridge, washing machine, cats dogs people, pipes , electric's gah the list go's on and on....... and one.

slh4283

I've worked in insurance for quite a while and I think the problem you have encountered is more the quality of the insurance rather then the policies.

Primarily, as previously stated you really need to keep your car and buildings insurance.

The other insurances are "non-essential", however before making a decision regarding any insurances, I know it's boring but consider what the policy actually covers by reading or speaking to the insurer, then compare with the premium and what you want it to cover.

In relation to boilers etc, unfortunately a lot of problems can be put down to maintenance which means that it wouldn't be covered. However if it bursts and causes water damage then this would be considered under your household policy. If you don't have the "peril" escape of water on your household insurance then it wouldn't pay out.

It's kind of inline with the whole PPI discussion - make sure you can claim and the product is suitable before you purchase otherwise it really isn't worth the premium. You are better having a few quality insurances rather than loads which aren't worth the paper they're written on.

Also, one word of caution, I have found when shopping round for insurance on the comparison sites, they don't always seem to provide the full cover you may be after. After doing the comparison I would run through a full quote with the insurer just to make sure.

lisyloo

dunstonh summed it up superbly here

Insurance is about making a judgement call and weighing up what is worth covering and what isnt and what the consequences will be if you suffer a claimable event or not.