Insurance

Insurance

Help and advice on protecting your family and getting the right home and car insurance

Handpicked content for you...

·         Securing your financial future

·         How much does protection insurance cost?

·         Car insurance – what does a good policy look like?

·         Buildings insurance

Car insurance Show

Choosing the right level of cover, getting the best deal, and tips for young drivers.

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Life and protection insurance Show

Learn about how to protect your financial future and find out more about the differences between life, critical illness and income protection insurance.

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Home insurance Show

Find out if you need buildings and contents insurance and get help with choosing the right policy and cover.

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Pet insurance Show

Help with choosing the right pet insurance policy and cover.

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Help with insurance Show

Understand what insurance is and how it works. Find out how to buy insurance and how to go about making a claim.

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Travel insurance Show

Learn how to choose the right level of cover, get the best deal, and how to make a travel insurance claim.

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What is insurance?

What is insurance?

Insurance helps you protect yourself against risks like a house fire, car accident or burglary. You can also get insurance that pays you money if you get too ill to work or to provide for your family if you die.

• How insurance works
• Do you need insurance?

How insurance works

Did you know?

Almost every adult in the UK has some kind of insurance – from car insurance to cover for pets getting ill.

With insurance, you choose what you want to be protected against. Then your insurer calculates the risk that the events to be insured will happen and the insurance provider or insurer will determine the price you will need to pay (your premium).

These are the three main steps.

1. Choose a policy. An insurance policy is a document that lists exactly what you are or aren’t protected against. For example, a travel insurance policy might say that it will cover your medical bills if you injure yourself abroad – but not if you were doing something dangerous, like skiing.
2. Pay the premium. The premium is the amount you pay each month or year (or sometimes just once) to have the insurance. The amount you pay depends on the risk and on the value of the events you’re insuring. For example, if you’re an inexperienced driver it’s more likely that you’ll have an accident, so your car insurance will cost more – and it’ll be even more if you drive an expensive car, because repairs will probably cost more.
3. Make a claim. If something happens that’s covered by the policy, you can claim on your insurance. You tell the insurance company what happened, they check that it’s covered under your policy, and if the claim meets with what you are protected against then they pay you as agreed.

There are a few more things you should know about getting insurance. Find out more in our other guides:

Do you need insurance?

There are lots of different types of insurance – you can cover almost anything, from your wedding to your pets.

Some insurance is compulsory – you can’t drive a car without at least basic car insurance, and you can’t get a mortgage on your house without buildings insurance.

After compulsory insurances, the most important thing is to protect yourself and your family. The types of insurance that you need will depend on what you need to protect. Ask yourself what’s important to you.

• If you have kids, what would happen to them if you died unexpectedly? Life insurance would help make sure they’re looked after financially.
• If you’re travelling abroad, get travel insurance to help pay your hospital fees and other expenses if you get injured or sick.
• If you have a big mortgage, what would happen if you became too ill to work? Income protection insurance could help cover your payments.

Think it over and look at prices – then you can start to decide what you want and what you can afford.

Making an insurance claim

Making an insurance claim

If everything goes well, making an insurance claim is simple and stress-free – especially if you take time to get all the details right. This article takes you through the process of making an effective claim on insurance like home, car and travel. A little further down you’ll find more information on life and health insurance like private medical insurance, income protection and critical illness cover.

• Be prepared – keep good records
• Your claim – step by step
• Life and health insurance – what’s different?
• Tips for getting your claim accepted
• Rejected claims

Be prepared – keep good records

Being prepared means you keep everything you need to hand just in case you need to make a claim. This means keeping receipts for the things that are insured, and keeping your policy documents somewhere safe.

If you’ve insured valuable objects it’s a good idea to take photographs showing their condition.

Your claim – step by step

Step 1 – Report it

If you’re claiming for something that has been stolen or vandalized, you should always report the incident to the police before doing anything else. Most policies have time limits for you to report things to the police so do it straight away.

Step 2 – Check your policy

The next step is to make sure you’re covered for whatever has happened, and then check if there is a procedure you need to follow.

Say you have a burst pipe and you need it fixed right away. Some policies state that you have to use a workman approved by the insurance company. Don’t just call your usual plumber – look at your policy, check you’re covered for burst pipes, and then get someone out to fix it who meets the criteria set out in your policy. Sometimes the insurance company will make all the arrangements for you.

Step 3 – Find all the documentation

Having everything to hand makes the whole process go more smoothly. You’ll need:

• your policy document
• receipts for anything stolen or damaged
• reference numbers – for example if you filed a police report

Step 4 – Get the facts straight

Remember

To help speed up the processing of your claim make sure you answer all questions truthfully and can fully explain the circumstances of any claim.

Be clear about exactly what happened so you can tell your story factually and consistently with no missing details or exaggeration. It’s often best to write it down.

Make sure you know:

• times and dates
• details of everyone involved (the other party in a car crash, perhaps, or the plumber that fixed your burst pipes)
• exactly what happened
• what you’re claiming for – how much money you expect to get

Step 5 – Bought through a broker? Call them first

When you buy your insurance policy through a broker, they’ll often help you claim. They might offer advice and support, or work with your insurance company and get almost everything done for you.

Either way, it’s well worth giving them a call before you talks to your insurance company.

Step 6 – Call the insurance company’s helpline

To make the claim itself, call the claims helpline for the insurance company. This number will usually be listed on your policy document, and on the insurer’s website. Be prepared to give all the details and information you worked out in steps 3 and 4.

Life and health insurance – what’s different?

If you file a life insurance or private medical insurance claim, your insurance company will usually have very specific rules about how you claim.

For example, with private medical insurance your claim is triggered when you have treatment. To get treatment you need to:

• visit your GP
• ask your GP to refer you to a private doctor
• contact your health insurance company to get approval for private treatment

For life insurance, critical illness and income protection claims, contact the insurance company first to make sure you know the exact procedure.

Tips for getting your claim accepted

• File your claim as soon as possible. Your policy may have a time limit for making claims – and even if you’ve got plenty of time, it’s best to file while the information is fresh in your mind.
• Give the details clearly. The easier you make things for your insurance company, the fewer hold-ups there will be when they’re processing your claim.
• Don’t exaggerate. Never try to overplay the value of your claim. Stick to the facts. Insurers are used to seeing claims that don’t stack up. Ask for too much and you could invalidate your claim.
• Document the damage. Take photos and videos of damaged possessions, substandard hotel rooms, or whatever you’re claiming for, as soon as the damage occurs. Note down flight numbers for delayed flights, make lists of items stolen – the more solid evidence you have, the quicker it is for an insurance company to process your claim.
• Document the claims process. Any time you talk to your insurance company, note down the date and time, the name of the person you spoke to and what was said. Keep any letters you’ve received, and copies of letters you send.

How to make an insurance complaint

How to make an insurance complaint

If you’re not happy with the service offered by your insurance company, or the way they have treated you, you have the right to complain.

• Why complain about an insurance company?
• Step 1 – Try to resolve the complaint informally
• Step 2 – Send a written complaint
• Step 3 – Ask the Financial Ombudsman Service for help
• Do you need an ‘expert’ to help with your insurance complaint?

Why complain about an insurance company?

There are a number of reasons why you might make a complaint about an insurance company:

• Repair work has been done to a poor standard
• Your policies have been automatically renewed without you realising it
• You might feel that your policies weren’t explained properly when they were sold to you

After you make a complaint, the insurance company will look at your complaint and see if it’s appropriate to compensate you.

If you think your claim has been unfairly rejected, follow the link below:

There’s a simple, step-by-step process you can go through to try and resolve the problem – first by complaining to your insurance company and then by asking the Financial Ombudsman Service to investigate your complaint for free.

Step 1 – Try to resolve the complaint informally

If you bought your policy through an insurance broker, they might make your complaint for you – it’s worth asking, to save yourself the hassle.

It’s sometimes possible to resolve a complaint informally with a quick phone call to the insurance company’s helpline. It’s a good first step – but make sure to note down who you spoke to, when, and what was said, just in case you need to take things further.

Step 2 – Send a written complaint

If you’re not happy with the company’s response to your informal complaint, or you prefer to write a letter than use the phone, you can make a written complaint. Every insurance company must publish a formal complaints procedure that you can follow if things go wrong. It tells you who to contact and when to expect a response. Many companies publish this on their website. If you can’t find it, contact them and ask for a copy.

How to write a formal insurance complaint letter

follow the tips below to write your letter of complaint.

• Mark the letter ‘complaint’ clearly at the top
• Put the date
• Give your name and policy number
• Explain your complaint clearly, stating what you’re unhappy about and when it happened
• Include any evidence you have to support your complaint
• Say what you would like the company to do to put things right
• State that if you are unhappy with the company’s response you will take the matter to the Financial Ombudsman Service (see below)

Keeping records of your complaint

Keep a copy of any correspondence and notes of any telephone conversations so you can pass them on to the Ombudsman Service if you need to. You should also keep:

• Every letter you receive
• A copy of every letter you send
• For every phone call related to your complaint, a note of the time, the date, who you spoke to and what was said

Step 3 – Ask the Financial Ombudsman Service for help

What is the Financial Ombudsman Service?

The Financial Ombudsman Service is a free service which helps to resolve disputes between consumers and financial services organizations, and deals with 5,000 enquiries every working day.

The Ombudsman Service is completely free to use.

When can you use the Financial Ombudsman Service?

Before you can use the Ombudsman Service, you have to follow your insurance company’s official complaints procedure. Once you’ve complained they have eight weeks to respond. You can contact the Ombudsman Service initially for advice, but they can only act after you get a final response from the insurance company, or as soon as the eight weeks are up.

How to complain to the Financial Ombudsman Service?

Download and complete a complaint form from the Financial Ombudsman Service website. Send it off with a copy of the final response letter from your insurance company plus any other documents you have that support your case.

Find out how to complain to the Financial Ombudsman Service on their website

What will the Ombudsman Service do?

The Ombudsman Service will look at the case based on the facts – you don’t have to worry about presentation or arguments, just about telling the truth in your own words. They will listen to your side of the story and the insurance company’s side and try to come to a fair judgement. They’ll either reject or accept your complaint, or help you come to a settlement with the company. If it decides you’ve been unfairly treated it has the power to make the company:

• Explain their actions
• Apologies
• Pay compensation

Your case will first of all be looked at by an ‘adjudicator’ but if either you or your insurance company is unhappy with the outcome, it can be referred up the chain to an ‘Ombudsman’. The Ombudsman’s decision is final and binding on your insurance company. If you’re still not happy with it, you can still take the case to court, but you’ll have to pay a lot of expenses. If the Ombudsman Service concludes you don’t deserve compensation then it’s extremely unlikely that you’ll win.

Do you need an ‘expert’ to help with your insurance complaint?

No. You shouldn’t need any special help or support if you complain. Also, the Ombudsman Service is a free and informal service and they prefer to hear from you in your own words.

Everyone has the right to have someone else to act on their behalf. Some people might like to have someone from their local Citizens Advice Bureau or a relative or friend to help them with their complaint.

Getting insurance if you have a criminal conviction

Getting insurance if you have a criminal conviction

Since April 2013 you no longer have to declare any ‘spent criminal convictions’ when applying for insurance. Your insurance company has to ask the necessary questions to work out if they can provide insurance for you.

• What counts as a criminal conviction?
• Is your conviction spent?
• When do you have to declare unspent convictions?
• What could happen if you don’t disclose convictions when asked?
• Where to get insurance if you have a conviction

What counts as a criminal conviction?

Did You Know?

You do not have to disclose any convictions that are spent.

A criminal conviction can be anything from a prison sentence to a fine for littering or a speeding conviction – all types of offence count, however minor.

Only unspent convictions matter. Even if asked, you do not have to disclose any convictions that are spent. Convictions become ‘spent’ a certain time after the date of conviction, and after that they’re not allowed to count against you. That’s the law according to the Rehabilitation of Offenders Act 1974.

You may be asked about the convictions of everyone covered by the insurance, such as your partner, children or grandchildren. If it’s home insurance, that’s everyone who lives in the house.

Simple cautions, reprimands and final warnings are spent immediately and do not need to be disclosed as these are not criminal convictions.

Unlock, the National Association of Reformed Offenders, publishes a handy guide on getting insurance with a criminal conviction.

Read Insurance and convictions – A detailed guide on the Unlock website

Is your conviction spent?

You can find out whether your conviction is spent either by:

• Checking through the list of conviction types on the Unlock website
• Using an online calculator from Unlock

Find out when your convictions are spent on the Unlock website

Calculate if your conviction is spent on the Unlock website

If your conviction is spent, you don’t need to declare it when you apply for insurance.

When do you have to declare unspent convictions?

• You only have to disclose convictions if you’re asked
• If you’re not asked directly, check whether the terms and conditions mention convictions
• Always get written confirmation of any convictions you’ve disclosed
• If you get a conviction during a policy you don’t have to declare it until you renew the insurance, unless your policy specifically says that you must

What could happen if you don’t disclose convictions when asked?

If you don’t disclose your convictions when asked by the insurance company, your insurance could be invalid. And if you’ve made a claim, the insurance company can ask for the money back.

Sometimes these things happen because the insurance company didn’t explain things clearly. If that’s the case, you may be able to get this resolved.

Where to get insurance if you have a conviction

One of the best places to start is with an insurance broker. Brokers can seek out the right insurance for your circumstances – and it’s free to get quotes through them.

Unlock offers a list of specialist insurance brokers for people with convictions.

Alternatively, you could search the database of insurance brokers on the British Insurance Brokers’ Association (BIBA) website.

How to buy insurance using comparison sites

How to buy insurance using comparison sites

You could make big savings on insurance by using price comparison websites, so it’s worth putting in a bit of time to get the best out of them. Remember they’re just showing you prices, not choosing the best product – you don’t have to pick the top result.

• The golden rules for using comparison sites
• How to use comparison sites

The golden rules for using comparison sites

Always check more than one site

Different insurance companies appear on different comparison sites. No one website can get you quotes from every single insurance company, and some big insurers, such as Direct Line, don’t appear on comparison sites at all.

Know how they make their money

Comparison websites do not sell products themselves, they show you details and prices from insurers and make their money in a number of ways:

• from ‘click-through’ where the site earns commission when a customer clicks through to the insurer’s website and buys a product
• they get paid from advertising which appears on their site
• some sites earn money from sponsored listings, where companies pay to have their products appear at the top of the search results

Cheapest isn’t always best

Be wise to the fact that comparison sites will try to hook you in by showing you lots of low prices. Remember that the cheapest insurance policies may not be such great value – they might have a high excess or not the right cover for what you want.

If you do select a product from a price comparison website you will normally click through to an insurance provider’s website to complete the purchase. At this point certain insurance providers will look to sell you additional products (add-ons). Before you purchase additional products you should consider whether you need them and the price (as there will be alternatives).

First isn’t always best either…

Comparison sites do not give ‘regulated advice’. That means they provide you with product information but not whether a policy has the type and level of cover suitable for your needs. So, don’t assume the first result is the best.

They’re not usually suitable for complex insurance

Many of the insurance policies featured on comparison sites are ‘standard products’ and won’t necessarily take your personal circumstances and needs into account.

Because they don’t give advice, you may have questions about unusual home, property or belongings to insure that comparison websites can’t answer.

For more complex insurance such as income protection, critical illness or private medical insurance it’s also a good idea to discuss the different types of insurance available so you can be sure you choose a policy best suited to your needs.

If this is the case, you can speak directly to the insurance company or an independent financial adviser or broker who will be able to advise you.

How to use comparison sites

Step 1 – Work out what policy and cover you need

Use comparison sites to get quotes, not to judge the quality of a policy. Once you know the kind of insurance policy and level of cover you’re looking for, you’ll be able to use comparison sites to help you get a good deal.

Step 2 – Pay attention to which answers are pre-filled

Insurance is complex and relies on many details that are specific to you, but comparison sites often make assumptions so they can make the process simpler for you. They sometimes use pre-filled answers to give you a standard set of results.

The policies they suggest might not be suitable if you have any non-standard requirements – for example if your house has a thatched roof or you’re over or under a certain age – so check all the questions have been answered correctly. You must make sure the details are right or you might not be covered if you need to make a claim.

Step 3 – Use more than one comparison site

Comparison websites cover different providers and products – remember not all providers appear on comparison sites. The Money Saving Expert website has done some research on which sites to use and in what order:

• How to compare home insurance, by MoneySavingExpert.com
• How to compare car insurance, by MoneySavingExpert.com How to compare pet insurance, by MoneySavingExpert.com

Step 4 – Don’t get spammed

Top tip

Use a different email address when getting comparison site quotes – that way your inbox won’t fill up with junk mail. Just remember if you do take out a policy your insurer will need to email you to confirm cover, policy schedule and wording and send out renewal notices.

It’s up to you to opt out of email and other marketing by making sure you tick or un-tick the relevant boxes. If you don’t you could get both marketing emails and phone calls, so read everything carefully.

Step 5 – Always check before you buy

When you are transferred from the comparison site to the insurer’s site it is essential that you check all the information is correct. If you don’t do this and incorrect information has been given to the insurer you may end up paying for invalid insurance.

Finally, always read the documentation before you buy a policy. If the documents aren’t available on the comparison site, click through to the insurance company’s own website to find and read the documents. If you can’t find them, don’t buy the policy. You need to make sure it will actually cover you if you need to claim.

Sort out a money problem or make a complaint

Sort out a money problem or make a complaint

If you’re unhappy with the service you got from your bank, financial adviser or any other financial company, it’s often easy to sort out. If talking things through doesn’t work, there’s always a formal way to complain – and if you’re still not happy, you can ask an independent service to investigate.

• What you should know before you complain
• Key steps to take if you want to complain
• Using the Consumer Rights Act to complain
• Avoiding payment issues
• Getting compensation if a firm goes bust

What you should know before you complain

In 2014-15, the Financial Ombudsman Service resolved 448,387 complaints – with more than nine in ten settled informally.

Source: FOS Annual Review

• There are some things you can’t reasonably complain about. For example, the value of your investments going down, unless you weren’t warned about the risk.
• You can get free help with your complaint. Independent complaints services (for example, the Financial Ombudsman Service) are free, but you have to have made a formal complaint to the company involved before you can use them. See the next section for the key steps you need to take first.
• Think twice before using a complaints company. Complaints companies will usually charge a fee to investigate for you. You can get the same help for free, and you’re just as likely to win.

Key steps to take if you want to complain

Steps 1 – Talk to the firm

Often you can sort out a complaint quickly just by talking to the firm. Tell them why you’re unhappy and what you’d like them to do to make things right. If they can’t give you a reasonable explanation of what’s wrong and don’t try to fix things, you may be able to take your complaint to an ombudsman service such as the Financial Ombudsman Service (FOS).

Step 2 – Make a formal complaint

All financial firms ought to have a formal complaints procedure to follow when you complain. It tells you:

• Who you should talk to or write to
• When you should expect a reply, and what to do if you’re not satisfied with the answer you get

You should be able to find their complaints procedure online – but if you can’t find it, ask for it.

If the complaints procedure involves something you’ve already done, like visiting your bank, make sure that the person you spoke to understands that they need to treat your complaint formally. And, try to put everything in writing, rather than talking over the phone.

You should get a final decision within eight weeks, explaining exactly how the firm will deal with the problem.

Step 3 – Get an impartial decision

After making a formal complaint, if you think the firm’s answer is unreasonable, or if you don’t hear from them within eight weeks, you have the right to take your complaint further. You can get free, official help from an independent complaints service, who can often order the company to pay compensation.

The services include:

• The Financial Ombudsman Service – this covers most financial complaints
• Finance & Leasing Association Arbitration Scheme
• The Pensions Ombudsman

The company’s complaints procedure should tell you which you should contact.

There are time limits for complaining to the Financial Ombudsman Service. You must complain:

• Within six months of the firm sending you their final response, and
• Within six years of the event you’re complaining about, or (if it’s more than six years) within three years of the time you could reasonably have known you had cause to complain.

Using the Consumer Rights Act to complain

As a consumer, you have a right to complain about your bank, or financial services firm using the Consumer Rights Act (CRA).

This might be the case; if for example, a financial services company falsely told you they were the cheapest mortgage adviser in town. In this situation, you may be able to claim breach of the CRA and request a financial remedy.

Avoiding payment issues

Different payment methods can lead to different problems. We’ve put together a list of tips to help keep you problem free regardless of how you choose to pay.

Cash

A simple, straightforward way to pay. But, always ask for a receipt – otherwise there might be no record of the transaction if there’s a problem and you need to prove payment or get a refund.

Cheques (you’re paying)

If someone pays you by cheque and it bounces, you may find it difficult to reclaim your money. When you get a cheque, don’t hand over the goods right away. Pay the cheque into your account first and wait for the funds to clear – it should take less than six working days.

Cheques  (you’re being paid)

Make sure you draw a line through any unused space on the payee and amount lines, and don’t leave any space before you start writing. That way the names and the amount of money can’t be altered. Also, make sure you keep enough money in your account to cover the full amount of the cheque – otherwise it might bounce, or your bank may charge you a fee.

Credit cards

If you buy something for between £100 and £30,000, both your credit card company and the seller are responsible for your purchase. This is true even if you only pay for a small percentage of the item by credit card, i.e. £1 on a £100 purchase.

If something goes wrong – for example, if the seller goes bust or if the goods are defective and the seller won’t refund them – contact your card company to get your money back.

Debit cards

Debit cards aren’t covered by the Consumer Credit Act, but most cards come with a charge back scheme. These schemes allow you to get a refund if the goods you bought don’t work, don’t arrive or if the seller goes bust. Contact your bank if you need a charge back on a debit card purchase.

Direct Debits

If something goes wrong with a Direct Debit payment – either because the organization you are buying from or your bank made a mistake – you are covered by the Direct Debit Guarantee. Once you notify your bank of the error, you should get a full refund, immediately. However if the mistake turns out to be your fault the bank may ask you to repay the refund.

Standing orders

If you or your bank makes a mistake with a standing order, there’s no guarantee that you’ll get your money back. So, it’s doubly important to make sure the payment dates and amounts are correct when you set up a standing order.

Overseas transfers

If something goes wrong when you send money overseas from the UK, the first step is to contact the firm that helped you with the transaction. They can usually help you sort out the problem.

Getting compensation if a firm goes bust

If you’ve lost money because a UK bank or financial firm has gone out of business you may be able to claim compensation through the Financial Services Compensation Scheme.

• The service is independent and free to use.
• It can help private individuals, some small businesses and all policyholders of compulsory insurance policies.
• It only applies to firms regulated by the Prudential Regulation Authority and the Financial Conduct Authority (which covers most financial firms).
• There are limits on the amount of compensation that you can claim.