We are all acutely aware of the rising cost of living currently being felt in the UK. From rapidly rising petrol and diesel prices and high energy prices to inflation currently rising at the fastest levels seen for 40 years. We understand that everyone is inevitably feeling the pressures on their finances.
Impacts of cost of living on insurance buying
With monthly outgoings rising, our thoughts turn to how this may impact insurance buying habits. Yes, cutting back on your insurance may reduce your outgoings in the short term. But what if you do need to make a claim?
Without the right insurance in place, you will need to find other ways to cover your financial losses. And in some cases, you may find that without the correct insurance in place you can face fines, penalties and even jail time.
Areas to consider when reviewing your insurance
Car insurance is a legal requirement. If you intend to drive a car, or any type of vehicle for that matter, you must take out insurance. Driving without insurance can see you face a £300 fixed penalty fine and 6 penalty points on your licence. In some cases, you may face an unlimited fine or be disqualified from driving.
If you are caught driving without insurance, you will have to declare this when you next come to buy insurance. And as a result, your premiums will likely be higher.
And whilst we would encourage you to shop around to get the best price for your car insurance don’t get caught out by a ghost broker – fraud can increase at times of financial pressure so be aware of this risk. Warning signs can include being contacted via social media, only the use of a mobile phone number, no valid website and a deal that seems too good to be true compared to other quotes.
Unlike car insurance, home insurance is not a legal requirement. So, there is a possibility you may start to see it as a luxury, rather than a necessity. But we would always disagree with this approach. Your home is your asset. If you were to suffer a fire, flood, or theft, could you reasonably cover the associated costs of replacing your contents or fixing the damage to your building?
Whilst not a legal requirement, mortgage lenders will insist that you have buildings cover in place to insure against a loss. So, if you own your property, you will need to fulfil this obligation. Whilst they will offer it, it is not necessary to buy household buildings insurance from your mortgage provider. You can access the market yourself. Or there is every likelihood you will get a better deal by buying through a registered Insurance Broker.
Some types of business insurance are a legal requirement – such as employers’ liability insurance. So, you should never cut back on these types of cover. Others will be necessary for the smooth running of your business. Some clients etc may require you to have certain insurance in place before they will work with you.
We blogged recently about the risks of underinsurance to your business. And the importance of obtaining not only the correct type of insurance for your business, but also the right level of cover.
When determining your insurance requirements, do keep in mind that Directors of businesses are particularly vulnerable to legal action if a business fails to buy adequate insurance protection and suffers a major loss.
Understand and manage your insurance
Cutting back on your insurance coverage will only ever be a short-term solution. We always say that you truly understand the value of insurance when you come to claim. And without the right insurance in place, you put yourself in a vulnerable position should the worst happen. It is important to understand that if you cut back on your insurance, you could face significant costs in the event of a claim.
The best way to manage your insurance costs is to have a full understanding of the cover that you need, and how much of that cover you require. Over insure and you will be paying for cover that ultimately you will not benefit from. Underinsure and you will face issues should you need to claim.
One of the best ways to have this awareness of your insurance needs is through working with an insurance broker. Insurance brokers are insurance experts so can work with you to understand the risks you face and the right insurance solutions for these risks. And at Anthony Jones we can often access a more competitive deal than you can access yourself due to our relationships with insurers which we have built up over many years.
If you are reviewing any of your insurance, from car to home, business to fleet insurance, get in touch with us at Anthony Jones and see how we can help you manage your costs whilst also maintaining the right level of insurance cover. Remember – it costs nothing to work with Anthony Jones to arrange your insurance. We are paid by insurers when we place cover. So if we don’t help you out, we do not earn anything.