Thursday, 28 Mar 2024

Insurance small print you have to check for before signing anything

Insurance is big business. At least 27 million households in the UK have it – and are paying hundreds of pounds for cover each month.

That’s a huge number, but it’s likely that with many policies are out there – you may have some that you’ve forgotten about.

Insurance contracts come in many shapes and sizes, but the main principle behind the policies is to cover you for those unexpected events in life that catch you by surprise and cost you money.

Here’s an overview of what to watch out for.

Terms and conditions

Insurance documents are a nightmare to read. For a start, they’re often in tiny font and use legalistic language that’s hard to understand.

We’ve also seen some that are over 140 pages long! That’s why insurers are obliged to give you a ‘key facts’ document that summarises in simple terms what the most important bits of the contract are.

We’d recommend skimming the documents looking for a few key things:

Excess fees: This is the amount of money knocked off your payment when you make a claim for certain things. As a general rule, the higher the excess, the lower the price of the policy. But it can be more cost effective to get a more expensive policy as excess fees can sometimes make claims not worthwhile.

Payment limits: This is the maximum the firm will pay out for certain types of claim. You can usually get higher limits for more expensive policies.

Reporting requirements: If you’re making a claim for theft or criminal damage, you’ll need to report the situation to the police and get proof – as well as let the insurer know asap.

Changing circumstances: If you move, have a medical issue or something happens that could affect the value of a claim, you generally need to notify the insurance company. This is because the change could affect your premiums.

Disclosure is a big part of many insurance contracts – and the source of many complaints. It most often applies to things like health conditions but can also involve any significant change of circumstances or even things like modifications to your car.

In a nutshell, you have to tell the insurer about anything that might affect the premium. So if you want to go on holiday but have a serious illness, you’re a higher risk so they’ll charge you more. If you neglect to mention it, you’ve ‘misrepresented’ the situation and the insurer can ‘void’ your contract – cancelling it without payment.

See our guide on how to buy car insurance.

General Insurance

General insurance is a ‘catch all’ term for insurance that isn’t health related. The most common products are home insurance, motor and travel.

Complaints can cover a range of subjects, from repairs and replacements, disputes over the value of items, contractors and contracts.

Travel insurance is particularly tricky as it’s the one form of insurance that’s designed to cover the widest range of problems. That’s why you’ll get references to volcanos and alcohol consumption all in the same document.

Remember: The key thing to remember here is just because a contract has a clause in it doesn’t make it fair. If the clause is so ambiguous it could be applied to loads of scenarios or is too hard to understand, you can appeal it. The same goes for really unfair things hidden in the contract that should be drawn to your attention.

See our guide on how to buy travel insurance.

Specific insurance

These contracts are designed to insure one specific thing, like your phone or your pet, and can be among the most contentious because some of them are rubbish. Warrantees, in particular, can be incredibly unfair, and some aren’t worth the paper they’re written on. But that doesn’t mean you don’t have any rights.

Pet insurance is the one area of complaint that causes the most distress. People love their pets dearly, but with vet’s bills increasing and insurers pulling out of the market, it’s getting more expensive to insure your pet.

Even if you only get a basic level of cover though, it can save you a fortune.

See our guide on how to buy pet insurance.

Resolver can help you sort out complaints about pretty much anything – so why not help a friend or relative sort out a problem, get a refund or make a claim. Get in touch: www.resolver.co.uk.

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