What insurances do I need for my home

HappyIdiotTalk

My ship is sinking and I need to cut down my monthly out-goings. I've looked at my debits and there are quite a few going out to insurance companies for various things... Need to check exactly what they are, but most *I think* are for house insurance, life insurance, critical illness... and stuff like that.

Could anyone tell me what I actually have to have, and what can be ditched. I know I defintely need house insurance as a condition of the mortgage, but are there any others?

CLAPTON

other than car insurance, you dont really actually HAVE to have insurance except maybe house insurance if the mortgage company insists, but my view is that house insurance is anyway essential...just think if there were a fire or severe damage to the house. also if you have dependants ... a partner that couldnot pay the mortgage if you died or a child then i would say that simple life insurance is both cheap and essential.

Next in line may be contents insurance...if you keep it simple it can be reasonably cheap especially if combined with house insurance.

most of the others are expensive and often dont often actually pay out anyway

Eager_Elephant

I agree with Clapton the only insurances you have to have by law is Car Insurance everything else is optional.

Also house insurance if the mortgage company insist but make sure you do the research yourself some mortgage companies organise it and you end up paying a higher rate.

The only insurances I have is 2 x car insurances and contents(as we rent). We have pets but these are not insured.

We have not taken out life insurance as my husbands would be excessive because although young he has a number of medical conditions, however he has service benefits for his job, if he dies I get about £500,000.

Depending on your job you might have this too. Otherwise just remember that your family could always live on benefits if god forbid anything should happen to you, I know we want to be seen to be leaving money but if you are in debt when you die then the house you own, your part of the equity would be used to clear your debts.

The other thing to think about with critical illness is that they have very strict criteria, such as they don't cover for a lot of illnesses.

I say it's better to cut your outgoings and pay your debt off as quick as possible.

have you posted your SOA or are you working towards that?

EE

Mrs_Optimist

we have building and contents insurance, car insurance and life assurance to cover the mortgage if either of us died (we have repayment mortgage). Other than that I personally view insurance as a waste of time and money - and a complete rip-off - I would rather save the money I save by not having critical illness etc in a separate account (not that I do of course, but the thought is there!!)

Xbigman

I have third party only car insurance and house insurance, and thats it. Insurance and yearly maintenance I consider a waste of time.

But you have to temper this with your circumstances. My house is tatty and my possessions are on average pretty old because I don't usually replace stuff until its worn out / breaks down. If my house burnt down I would gain so much in the rebuild I would not worry about contents. Likewise crime is low and house security is excellent. I think its worth the risk.
I had the car serviced by the main dealer this year as it was 6 years old and still had the original transmission oil, break fluid and cam belt. It was worth it this once. I'll now run the car for 3 years before a cheap qwik fit service, then I'll run it till it stops and replace. This works for me but if you had a newer car it might pay to service it regularly to keep the resale value up.

This way of looking at life began when I was in debt and I used the savings to clear the debt sooner. Now I pile money up in a savings account for replacing stuff as it needs it, currently there's £1560 sitting there, and rising.
Who needs insurance?
Regards



X

HappyIdiotTalk

Eager_Elephant wrote:

have you posted your SOA or are you working towards that?

EE

SOA? Whats that?

I think I will definitely look into getting rid of the critical illness then. I moved house a couple of years ago and the mortgage payments went up as a result. However before I moved I was paying about £200-300 a month on credit cards. The idea was that I would payoff the credit cards with some of the profits from the sale of the house and use the extra £200-300 to cover the extra money needed for the mortgage.

However you can probably guess whats happened. The credit card has crept up again, and my income hasn't! I only owe about 2.5k, and I'm only about £600 overdrawn. But I've been trying all year to clear both to no avail! mainly by cutting down on spending. Its just not working so I'm now looking at saving money elsewhere.

I'm quitting my National Lottery subscruiption £18 per month.

I'm not renewing my mobile phone contract next month, and will simply keep the phone with a Pay As You Go card. Thats abother £30 saving per month.

I'm going to find another credit card and transfer the balance from my Egg card to it to save on interest, then setup my Egg card to clear each month.

I'm also thinking of cashing in the endowement I've been paying into for the past 12 years. That will save me £65 per month and hopefully generate enough cash to clear my debts, which might make the new credit card unnecessary. But I'm in three minds about this. The insurance man from the COOP told me a couple of years ago to keep it as the market would no doubt pick up again and its value increase. And I'm also thinking about claiming for compensation as the man from the L&G who sold it to me in 93' said it would generate 40k on maturity, and possibly give me a lump sum on top. The L&G sent me a letter a couple of years ago saying otherwise.

In any event I have 4 months to get straight as we're expecting another baby and the wife will be out of work, and only receiving the minimum from the government due to working part time.

Thanks again.

Colin

skintchick

Your SOA is your statement of affairs, or budget.

List all your outgoings, debts plus APRs, and incomings and we will advise you on what to cut to save money.

Ali-OK

I had:

Car Insurance
House & contents insurance
Life insurance x 2
Income protection insurance

The car, house and one life policy I consider necessary.

The second life insurance was to pay out an amount if something happens to me whilst my child is young and the income protection in case I got made redundant/long term sick problem. I've ceased these now, but save 60% of what I used to pay out - hopefully building it to an emergency fund for the same purpose.

Before you cash in your endowment, look to sell it on first. For certain policies, you can get quite a bit more than cashing it in. And yes, get your claim in endowment mis-selling.

Contract to PAYG has saved me £25 a month and the spend has been first top up of £10, £2 from provider and over £9 left in credit. Well worth it.

FOr how do your SOA, have a look at the Sticky thread by SouthernScouser.

HappyIdiotTalk

OK here it is, my SOA as best I can do it this late at night. This lists all the money that defintely comes out of my account every month. It does not include the odd expenditure like the odd lunch, bacon sarnie on Friday morning, random eBay purchases, clothes ect...

I had not realised that my regular monthly payments added up to so much. However this is mostly down to the higher mortgage I've taken on 18 months ago. Plus my gas and electricity bills have both doubled somehow... Could be this larger house, but I'm suspecious... seems to high to me.

I'm embarassed at not knowing what four of the insurance paments are for. I'm guessing at least one of those is the life/critical health insurance. No idea what the other three are. I'm further guessing that the first thing you'll tell me is to find out what they are... I agree.

Anyway here it is (it looked good in Excel):

Imcoming £ per month Note
===========================
Salary £1,500.00

Outgoing £ per month Note
========================================
CIS OB Insurance £5.58 No idea what this is
CIS F&A Insurance £25.01 No idea what this is either
Norwich Union £33.09 Or this
Norwich Union £28.01 Or this
Roadside Assist (wifes car) £4.40
Npower (gas or electric) £54.00
Npower (gas or electric) £72.50
National Lottery £18.00
Car Loan (CAHOOT 5.8%) £220.45 10k started 2 months ago
Legal & General MI C/L £13.88 Not sure what this is?
Legal & General Endowement £63.00 40k mortgage matures 2018
Egg credit card £42.00 Minimum payment at the moment
Mortgage £661.26 50k Interest only, 70k repay
Orange Mobile Phone £33.63 This goes next month
Diesel for car £100.00 +/- £25
Shopping £150.00 Food ect
===============================
Total Out £1,524.81

Debts £ per month Note
=======================================
Barclays Overdraft £608.62
Car loan (CAHOOT) £9,500.00 This doesnt really count
Egg Credit Card £3,000.00 Approx, egg down, cant check
==================================
Total Debt £13,108.62


So thats me. According to USwitch, I might be able to save £400 a year by switching to PowerGen. My saving grace may be that I might be getting a £3000 to £6000 payment later in the year as a settlement from the company I used to work for. But thats not guaranteed, and I still need to sort this out.

Any ideas? I'm obviously spending more money than I'm bringing in at the moment.

Colin

Hereward

HappyIdiotTalk wrote:

Outgoing £ per month Note
========================================
CIS OB Insurance £5.58 No idea what this is

CIS OB Insureance is ussaly a life Assurance policy. It should cover your mortgage if, heaven forbid, you died. I don't know what the other insurances are. I would suggest if you don't know what then are then you probably don't need them: you could always phone up the payees to find out.

HappyIdiotTalk

Just called L&G. The £13.88 with them is a decreasing term life insurance. I must have taken this out with the endowment way back in '93.

The surrender value for the endowement I have with them is £9,360.30. I'm seriously thinking about cashing it in and paying off the loan on the car. That would decrease my out-goings by £220 per month and really ease the burden. Plus I'd save an additional £65 per month on the endowment itself. The more I think about it, the more I think its a good idea.

About the compensation for endowment miss-selling, could someone summarise what this involves, costs, what I could be compensated ect... To b honest I might have missed the boat on this. Looking at my records last night I saw a letter from the L&G stating that they sent a letter to me back in 2001. And isn't there a limit of 3 years to claim after being notified?

Thanks again.

Colin