Insurance. Clearly Explained.

Protection for yourself and what you love the most in case the worst should happen. Here’s what you need to know.

Do you really need insurance?

Insurance can be expensive and feel unnecessary, and sometimes it’s not optional such as car insurance and buildings insurance. But the things you value tend to change as you grow in life, and protecting what matters most to you is often worth it, even just for the peace of mind.

How insurance works

Insurance is like most things in finance, incredibly dull for most! It’s all down to risk and complicated maths to work out how much you should be paying. Insurers will use data to work out the likelihood of an event happening, such as crashing your car, and then determine how much to charge to insure against that event happening, called a premium. It’s big business but ultimately protects you too.

There’s always a better deal

The insurance industry is super competitive and there are hundreds of insurance providers for all the different types of insurance out there all competing for you as a customer. 

Always shop around and compare quotes, and equally important; don’t auto renew your policy each year, shop around again so you don’t lose out on big savings. If you can, pay in one go too as you normally get a discount.

We recommend using MoneySuperMarket to compare quotes for all types of insurance as they also use their own money to knock down the prices further!

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Types of insurance

Car insurance

It’s a legal requirement for driving, so not optional, and there’s 3 main types of insurance:

Fully comprehensive – Insures yourself from injuries, your car and other drivers and their cars. Recommended for most drivers.

Third-party, fire and theft – This doesn’t insure yourself or your car, just other drivers and their cars (third parties), but also covers fire damage and if your car gets stolen.

Third-party – This is insuring just other drivers and their cars. You are not covered at all, even for fire damage or theft. This is the minimum legal requirement for driving.

Get quotes for all three types when searching for car insurance – you may be surprised which type is actually cheaper for you!

Home insurance

Protection for a home that you own. It covers you from structural damage, fires and floods and often for burglary and damage to the contents inside your home from accidents. It’s not a legal requirement, but almost all mortgage lenders require you to take out insurance on the home so they are protected too.

If you are renting, you don’t need this. Your landlord will have insurance for the building itself. However you will need contents insurance if you want to protect your belongings.

Travel insurance

Protection for you and your family on your holidays abroad. It’s not just if you fall ill, or have an accident, but also if you lose your possessions, your flights are cancelled and if your accommodation has fallen through.

Life insurance

It’s hard to think about, but life insurance is protection for your loved ones after you pass away. It’s often used to help pay off the mortgage on your home and provide some financial support to your partner and children.

Pet insurance

Vet bills are surprisingly expensive, and often not thought about when buying pets, but once they become part of the family you can look out for them too and cover any illnesses and injuries so they can be well looked after.

Other insurance

Whatever you think of you can probably insure! From watches and jewellery, to protection from hacking attempts, it’s all out there.