None of us know
what is going to happen to us in the
future but what we do know is that accidents
happen. This is the simple idea that
the insurance industry is founded on.
You never know when you might crash
your car or come home to find someone
has broken into your home. But what
you can do is protect yourself financially
against something going wrong at some
point in the future. This protection
is what we call insurance.
Insurance can seem
complicated but the basic principles
are really quite straightforward.
company works out how likely it is
that an accident or event will happen
and what it would cost to put it right.
on this, the insurance company sets
what is know as a premium. This is
the amount it asks you to pay in order
to protect yourself against the accident
or event. The cost of the premium
is often spread so you pay it on a
it is you have insured yourself against
happens, you then make a claim to
your insurance company and it pays
out the agreed amount.
There are hundreds of insurance policies
on offer and you can buy them from many
go direct to an insurance company,
usually via a call centre or the company’s
Internet site these days.
buy many policies from places such
as banks or supermarkets.
buy some insurance policies alongside
the products and services they cover.
Travel agents, for example, usually
sell travel insurance and many shops
offer breakdown cover for the products
use an insurance broker to help you
find the right policies.
It is up to you
where you get your insurance. If you
are applying for a mortgage or booking
a holiday, for example, you don’t
have to buy the insurance policy that
the bank or travel agent may offer.
Interesting Fact: There
are more than 800 insurance companies
authorised to operate in the UK*.
Insurance Key Facts, 2003/4, Association
of British Insurers)
on the dotted line
It is important to read an insurance
policy carefully before signing it to
make sure it provides the cover you
are expecting and that you are aware
of anything it might exclude. With some
policies you get what is known as a
cooling-off period, which gives you
the chance to read through the policy
thoroughly and change your mind within
a set amount of time if you feel you
Different types of insurance
There are many
different types of insurance. In fact,
as long as you’ve got enough cash
to pay the premium, it’s possible
to insure yourself against most things.
You’ve probably heard stories
of film stars insuring their bodies
or musicians their voices but, for most
of us, there are just a few insurance
polices that we might need to consider.
These can be grouped under two main