Money Help Guides

Insurance

These days, you can insure almost anything of value. Hollywood celebrities even insure their beautiful legs and winning smiles!

In reality, most people only need to insure the things most important to them - namely their home, car and family. Even when you're trying to repay debt, these types of insurance can be very important.

However, if you're focused on repaying your debts as quickly as possible, you'll want to find the best possible insurance deals for your circumstances. You can do this by:

• Comparing different deals online
• Getting in touch with an insurance adviser, who can help you find a good deal

It's also important to know what you want from your insurance. With that in mind, here's a quick rundown of some of the most important types of insurance.

Motor insurance

If you own a car or motorbike, it's a legal requirement to insure it. There are different 'levels' of motor insurance, so you'll need to find the one which is right for you - and which you can afford.

• Third party can cover you if you damage someone else's car or property in an accident - but will not cover you for damage to your car. (This used to be the cheapest form of motor insurance, but that's not always the case anymore.)
• Third party fire and theft is the same, but can also cover you if your car is stolen or damaged by fire.
• Comprehensive insurance can help with all of the above as well as covering you for damage to your car if an accident is your fault.

Home insurance

There are two important varieties of home insurance - buildings and contents.

Buildings insurance

If you own a property, it's a good idea to have buildings insurance, in case there is any damage to your home from a fire, natural disaster or the weather. This cover could also extend to things like fixtures and fittings, such as fitted wardrobes. It's also worth noting that some mortgage providers require you to have this type of insurance.

Contents insurance

Your furniture, white goods, laptops, stereos, computers, etc. could be worth thousands of pounds. Contents insurance can often protect your possessions in the event of fire damage, accidental damage, loss or theft.

New-for-old cover could replace any of your items with an equivalent new item. Depending on the policy you choose, it might also cover your possessions when you take them out of your home.

Life Insurance

Life insurance can pay money out to your family or loved ones in the event of your death. This can really provide peace of mind if your family are dependent on your income.

Individual policies vary, but in general there's:

• Term life insurance, which covers you for an agreed amount of time. If you outlived the policy, your beneficiaries would receive nothing.
• Whole-of-life insurance, which will cover you for your entire life, so your family are more or less guaranteed to receive a payout in the event of your death. However, these policies are generally more expensive.
• Critical illness insurance, which is designed to pay out a lump sum if you are diagnosed with a serious illness, such as a stroke, cancer or Alzheimer's disease. You can choose to cover yourself for a fixed term or for the whole of your life.

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