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Do you need insurance or additional cover?

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Many of us live day-to-day without thinking about what we would do if the unexpected happened. But how would you or your family cope financially if you were to lose your job or become ill? Use the following checklist to take stock of your current situation and help you identify any areas where you feel you may need some or additional cover.

  • Do you need insurance? Use the Budget calculator to help you get a clear view of the money you’ve got coming in against all your outgoings. This will help you work out how you would cope if you had to pay for replacing items that were stolen or damaged, or how you would manage if you lost an income.
  • What would happen if you or your partner became seriously ill or disabled? There are insurance products, sometimes known as protection insurance, that pay out in these instances but they usually only pay out for a limited time and don’t cover all illnesses. Always check the exclusions before you take out a policy. You can find out what different protection insurance covers and when you might need it in Protecting your income or borrowing.
  • What would happen if you or your partner died suddenly? Could you or your family manage without the income? Life insurance is about providing some financial security for people who depend on you if you died. It’s also a good idea to check what your pension plans would pay out if you died.
  • Are you a home owner? If your home was destroyed by a fire or flood you would still have your mortgage to pay. Most mortgage providers insist that you take out buildings insurance with your mortgage but it’s worth checking that the amount covered is enough to rebuild your house.
  • What about your belongings? Whether you own your home or are renting, it’s your responsibility to cover your belongings. Contents insurance covers the loss of or damage to the contents of your home – for example, furniture, electrical items such as TVs, computers, radios, and smaller items like cameras, jewellery, briefcases and other items you carry outside of your home. Take time to work out the value of your belongings as it’s all too easy to under-insure.
  • Do you own a car? The law insists that you have basic motor insurance if you drive but you may want to increase your cover, for example to replace a written-off car.
  • Do you have pets? Animals can present you with nasty surprises in the way of vet’s bills. Pet insurance can pay towards a vet’s bills and some will pay for you to advertise if your pet has been lost; or for kennel/cattery fees if you suddenly have to go into hospital.
  • Are you going on holiday? Travel insurance can cover you against mishaps while you’re abroad, from lost luggage and theft to flight delays as well as medical bills. Make sure you read the policy summary for exclusions – there are bound to be some.

Before you take out any insurance always remember to check the details of the policy so you are sure it covers you for what you need it to.