Common types of insurance in UK

Insurance can offer invaluable protection against unforseen events. The price you pay is called a premium.
Common types of insurance relate to:

• your home – if you own your home, you should have buildings insurance to cover damage to the building
• your belongings – contents insurance covers loss or damage to your household possessions
• driving – you are required to insure against damage or injury caused by your vehicle to other vehicles and people (you can also insure yourself against theft, damage to your vehicle and injuries caused while driving)
• travel – travel insurance covers you against the cost of delays, lost property and medical bills while abroad
• life insurance – your family will get a payment if you die unexpectedly. You should also check what payment is due from your pension scheme if you die
• pets - you can insure your pet against the cost of vets’ bills, costs incurred finding a lost pet, or if you are unable to care for a pet because of illness.

You may have heard stories in the news about people being wrongly sold Payment Protection Insurance (PPI) when they took out a loan or overdraft.

Where you can buy insurance

You can buy insurance from:

• an insurer directly
• banks and building societies
• insurance brokers and other financial advisers
• supermarkets and other retailers.

In each case, the firm selling insurance should be regulated by the Financial Conduct Authority (FCA).
You should always get quotes from several companies or use an online calculator before taking out insurance. Insurance brokers can act on your behalf to compare prices and find the best policy for your needs.
Remember: the cheapest policy may not be the best value if there are lots of restrictions on when you can make a claim and how much for.

7 tips for buying insurance

• Give full and truthful information when applying for insurance. If you don’t, your policy may be void and you will not be able to make a claim.
• Give a full account of any medical conditions when requested.
• Check for any age limits on the cover provided.
• Look out for excess charges on the policy? An excess is the amount you will have to pay towards any claim before the insurance company will contribute.
• If you pay by standing order and change insurer, remember to cancel the standing order so you don’t end up paying for two policies.
• Read the terms and conditions of your policy or ask the adviser to explain them, so that you don’t have any nasty surprises later on.
• If you’re buying an extended warranty for a product, check whether you’re covered elsewhere (for example, through contents insurance).

Should you trace old insurance policies?

Old savings, life or pensions policies may still have value and be worth tracing.
Most other types of insurance, such as household or motor policies, do not have any value after the period covered has finished.

Insurance complaints

If you’re unhappy with how a claim is handled or with any other aspect of the service, your insurer can let you know how to make a claim. This information should also be in your policy document.
If you're not happy with the response to your claim, ask the Financial Ombudsman to take up the case.