When you are nearing the end of your formal education and gearing up to throw yourself into the world of adulthood, there are lots of potentially confusing concepts to get to grips with.
Insurance is arguably the most important of the bunch, as everyone will need some kind of cover after leaving college, and plenty of people will require several different policies to protect themselves from a deluge of potentially costly disasters.
To help you overcome the most common pitfalls of insurance-hunting, here are a few misconceptions and bad habits to break out of.
1. Basic Insurance is Enough
Whether you need car insurance or are thinking about getting life insurance, the price of policies can vary wildly, and you may be tempted to just opt for the most affordable and thus the most basic cover available.
Of course, a whole range of other factors impact the cost of insurance; for example, certain hobbies affect life insurance and you will pay more if you want to be covered in the event of an accident that occurs when you are partaking in a particularly dangerous pastime such as an extreme sport.
Ultimately you want to make sure that the insurance you get is going to cover you for the kind of lifestyle you want to live, otherwise it will be money wasted.
Paying extra for protection against dilemmas that could realistically befall you will be worthwhile, or of course, you could choose to make lifestyle changes to save on premium costs if you wish.
Either way, settling for a basic policy is usually a bad idea.
2. Comprehensive Coverage is All-encompassing
Just as basic insurance packages are worth avoiding, you should also remember to read the small print of any policy that markets itself as ‘full’ or ‘comprehensive’ because there are always exclusions and exceptions that you need to be aware of when you commit.
This is especially relevant for things like car insurance and home insurance, both of which may have glaring gaps in the cover for things like accidental damage, theft and faults that could come back to bite you if you do not know about them until you go to make a claim.
3. Negotiation is an Option
While you can haggle in plenty of consumer scenarios, it is extremely difficult to get a discount on most types of insurance, aside from whatever incentive is available to all customers of a given provider.
This again comes down to the fact that your lifestyle, circumstances and claims history will all be used to calculate premium prices, so unless you can change one of these aspects, you will not be able to barter with an insurance salesperson to bag a discount.
4. Car Insurance Applies to Any Driver
Although you might assume that if you have car insurance, it is the vehicle itself that is covered, regardless of who is behind the wheel, this is generally not the case.
This means you should not just lend your car to friends and family without first making sure that they either have cover via a short term policy, or have their own insurance which protects them when driving any vehicle.
Once again it is all about drilling down into the details found in the small print and never making any assumptions about how far your cover stretches.
If you are ever in doubt, ask an insurance professional for advice and perhaps go through an independent broker so that you can get the impartial guidance you need to make the right decisions.
