Insurance saving - part 1

While car insurance is mandatory, much of the rest – house, contents, travel – while strongly advisable, is nonetheless optional. Most of us cannot afford to rebuild our home from scratch. The same can be said of the price of an inflated insurance policy, but we easily allow ourselves to pay over the odds (without necessarily knowing it is over the odds) because we have not taken the time to look around for a better deal.

The Internet has made finding cheaper insurance easy and you can compare many policies in a short time. It is well worth finding a cheaper policy and having a word with your existing insurer to see if they are willing to match the lower price. If not, you will have numerous alternative providers, all of which want your business and will be at their most receptive.

Because our life expectancy has never been higher and people are, in general, living longer, the cost of insuring against death (life insurance) is getting cheaper all the time. If you were sold a policy when you took out or mortgage, what with all the pressure, you may have missed out on much better deals.

Also, banks and other lenders continue to use hard-sell techniques to push expensive insurance policies to cover conventional loans to people who do not really need it. This is in contrast to a mortgage protection scheme, which is advisable.

In a similar vein, electrical goods are more reliable than ever, so if your new hi-fi will not last three years, perhaps it is not worth buying in the first place. How many times has your fridge broken down in the last five years? The phone number and a good relationship with a local handyman is likely to cost less in the long run.

And on the subject of insurance premiums. If you pay by monthly instalments, then the chances are being charged a premium of between 15% and 20% for the privilege. If, for instance, your home and car insurance bill for the year is £600, you are paying up to £120 a year in interest by paying monthly. If you are in a position to save up for next year's premiums in advance, you can save money by paying the whole lot in one go.

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