With the summer holidays around the corner and the soaring cost of car insurance prompting more drivers to shop around for their policies, the number of people looking for value-for-money cover is higher than ever.
But many of those on the search for travel, home and car insurance are at a disadvantage before they even start due to the many insurance myths circulating in today’s society.
Motorists, for example, could easily miss out on better cover for less because they believe that a comprehensive policy is always more expensive than third party insurance.
And travellers wanting to insure their valuables could find themselves out of pocket if they fail to check the single item limit.
Fortunately, moneysupermarket.com is here to bust those insurance myths right out of the water – and help you find the best cover at the best price.
1. It’s cheaper to buy direct
It’s a common misconception that comparison websites such as moneysupermarket.com charge users commission, making their quotes more expensive than buying direct.
In fact, the average saving for consumers using moneysupermarket.com to buy home insurance is £113 a year, while a typical motorist shaves an incredible £307 off the annual cost of car cover.
2. Insurers reward loyalty
It would be nice to think that insurers would offer their best deals to loyal customers. But that is not the case. Instead, they reserve their most competitive deals for new customers and rely on their existing customers being too lazy to shop around once their policies come up for renewal.
It is therefore well worth your while seeing how much it would cost you to switch to a rival. After all, even if you’d prefer to remain with your current insurer, you can ask it to match the best quote you have received elsewhere .
3. You don’t need travel insurance if you have an EHIC card
The free European Health Insurance Card (EHIC) entitles the holder to medical treatment in state run hospitals in any EU country (plus Iceland, Norway, Liechtenstein and Switzerland) at the same cost as a local – which often means it’s free.
Every traveller to Europe should therefore get one and keep it on them – especially as some insurers will reject medical claims made by those without one.
However, the card should never been seen as a substitute for travel insurance, which covers costs incurred if EHIC treatment isn’t free and private hospital treatment, as well as cancellation, baggage loss or theft and more.
4. Third party car cover is cheaper than fully comprehensive
It seems logical that third-party car insurance will work out cheaper than comprehensive cover due to the fact it offers less protection.
But research from moneysupermarket.com shows this is not always true, with younger drivers in particular often finding it costs less to insure their cars on a fully comprehensive basis.
The main reason for this is that insurers have noticed that motorists with riskier profiles often tend to opt for third-party policies and have reacted to this perceived increase in risk by driving up the cost.
5. Policy excesses only count if you are at fault
The excess on your home, travel or car policy is the amount you will pay towards a claim. This applies across the board for home and travel policyholders.
For motorists, it is also worth pointing out that while your insurer should cover all your repair costs if you are in an accident, you will still have to pay the excess if the insurer cannot reclaim the full amount.
6. You can claim for any item worth up to the overall policy limit
Home and travel policies generally stipulate a single item limit that will apply to any claims made.
If, for example, you have a plasma-screen tv worth several thousands of pounds, you may well find that your home contents insurer will refuse to pay out the full value should it be damaged or stolen.
When it comes to travel insurance, you should also check the baggage section of the policy to ensure that the single item limit is high enough to cover any valuables you plan to take away with you.
7. It’s fine to insure your car in a parent’s name
Young drivers are often hit with sky-high insurance premiums for the first few years they are on the roads.
Consequently, a lot of youngsters cut the cost by insuring their cars in a parent’s name and adding themselves as a named driver – a practice known as ‘fronting’.
However, ‘fronting’ is illegal and will also invalidate the policy, meaning that any claims made could easily be rejected.
8. You can always claim for items stolen from your car
The modern day motorist often has a number of high-value gadgets, such as MP3 players, mobile phones and SatNavs, in his or her car.
Unfortunately, however, not all policies will cover these possessions if your car is broken into or stolen.
In fact, most insurers apply an upper limit for such claims even if the items are hidden or locked away in the glove box, so make sure you remove anything expensive from the vehicle whenever you leave it.
9. Insurers will cover you against natural disasters
Home insurance policies often contain clauses referring to “Acts of God” that limit the company’s liability in the event of natural phenomena such as floods, earthquakes and hurricanes.
This gives them the right to refuse large claims made a result of events of this kind, although many policies will provide a certain level of cover for flood or storm damage, for example.
Consequently, it is vital to read the small print before taking out a buildings or contents policy. The same is true of travel cover, as bad weather and volcanic ash clouds can easily derail your holiday plans.
10. Cheapest is best
While price is an important factor when buying insurance it’s not the only consideration. It’s also vital to ensure you have the right level of cover.
Because of the level of competition in the car insurance market, for example, many insurers have cut their premiums by stripping out elements, such as windscreen cover, that used to be included as standard.
It is therefore important, not only to make sure you have the level of cover you need but also to ensure that, when you are shopping around, you are comparing like-for-like.
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