-Buying insurance & need for insurance

Before buying insurance, one must make sure that he analyses his personal situation, with respect to whether he really needs insurance or not. There are a few compulsory insurance that you may have to take, like while buying a car, you must compulsorily have atleast a third party accident insurance. At the same time, there are other insurance schemes which may not be compulsory but optional, like insuring your pet dog, travel insurance, etc.
There are hundreds of insurance policies and type available in the market. Should you take each and every type of insurance? You don't have to take out most insurance but for your own satisfaction and peace of mind, you may like to consider some of the insurance policies. You may like to try the Financial healthcheck link offered by FSA to help you prioritise your insurance goals and requirements.
Insurance firms and agents or brokers selling insurance policies and those providing insurance cover (underwriting the risk) are usually regulated by FSA, or they are authorized agents of a regulated firm. There are some exceptions, for example travel agents that sell travel insurance do not usually need to be regulated by the FSA.
Regulated firms and their agents are put on the registered accounts of FSA and they find a place on FSA register only if they meet certain criteria and standards. While buying insurance policies, always make sure that the firm you use is registered with FSA before giving over your money. If they aren't regulated by FSA and things go wrong, you won't have access to complaints and compensation procedures through FSA. To find out if a firm, broker or agent is registered with FSA, you may Check the FSA Register.
Once you’ve checked the credibility and authenticity of the insurer or firm offering insurance, you can buy insurance in one of the following ways:
• directly from insurers over the phone,
• on the internet through their website and online payment
• by mail, sending them all the required documents and cheque
• you can also buy insurance from other types of firms such as banks, building societies, insurance brokers, financial advisers, mortgage brokers, or supermarkets – more on these in a later article.
First, set your requirements and then get the facts about the insurance policy you buy:
Insurance differs in what it covers and what it doesn't cover (the exclusions). Read the policy summary that the insurance company will give you to find out exactly what you're getting and use it to shop around and compare other policies.
Whatever type of insurance you decide to take out, always:
• ensure the firm is authorised by FSA to sell insurance using Check the FSA Register..
• disclose the full facts when applying for insurance – if you don't, you could invalidate your policy and the insurance company will not pay out in the event of a claim;
• read the policy summary for exclusions – to ensure that you choose the right policy for you; and
• shop around using the documents to ensure you get the best deal for you. Some policies might be cheaper than others, but they may not offer the same level of protection.

No comments: