Wave goodbye to high premiums

Many of us either pay too much for our insurance or don't get any cover at all.

The recent floods in the south-east of England have brought home the importance of insurance cover. While those house- holders living in flooded towns worry if insurers will pay up and whether their premiums will spiral in the future, those lucky enough not to be affected may be considering their own cover - or lack of it.

The recent floods in the south-east of England have brought home the importance of insurance cover. While those house- holders living in flooded towns worry if insurers will pay up and whether their premiums will spiral in the future, those lucky enough not to be affected may be considering their own cover - or lack of it.

Generally, we don't spend much time thinking about insurance. According to the British Insurance Brokers' Association (Biba), over a third of us don't seek out the best price and fail to shop around for the most competitive premiums. We end up spending several hundred pounds more than necessary.

"The insurance market is changing so much and there are quite a few new entrants," says Jennifer Weller at Biba. "It is important to shop around as you are going to get a better deal that way."

Although there are fewer pro-viders as big insurers such as CGU and Norwich Union merge, there are growing numbers of distributors: supermarkets, retailers and internet banks all offer various forms of insurance. This means the array of choice can be bewildering.

Finding the right insurer is further complicated as the cheapest policy almost certainly isn't the best. The cover you get is the most important factor; unfortunately, many people don't know the limitations of a policy until they make a claim.

Many of us stick with the same insurer we've used in the past, particularly when it comes to car cover, on the mistaken assumption we'll get a better deal because our insurer will know our motoring history.

"The consumer needs to be proactive," says Ms Weller. "If you have been with the same insurer for a long time, you may find your premiums start to look less attractive compared with some other offers on the market."

Her advice is to approach your current insurer first and ask it to reconsider your premium. If it won't, it is worth looking elsewhere. In some cases, the problem may be that your insurer has information about your circumstances that is not quite right. For example, if you park your car in a garage but the insurer has wrongly factored into the calculation that you park on the road, it could inflate your premiums.

"Check if your personal details have changed since your last renewal," says a spokesman for Churchill. "It is worth making sure the policy is rated properly."

With the obvious advantages of shopping around, why do so few bother? Most of us think it takes too much time for the sake of saving a few pounds. This explains why many people still buy single-trip travel cover from the travel agent when buying a holiday, when an annual policy is nearly always cheaper.

Luckily, the internet has made the process of comparing deals much easier. A number of brokers - such as Egg, 1st Quote and Screentrade - compare prices between different insurers.

While some of us are paying over the odds for our insurance, even more worrying is that others don't bother getting any cover at all for household contents or short holidays. Yet if they are burgled, or fall ill on holiday and need to be repatriated, they may regret that decision. According to a survey by Primary Direct, 6 per cent of people don't buy travel cover when they go on holiday, while many others believe that the form E111 will cover any treatment should they fall ill.

But if you travel to North America without travel insurance and are unfortunate enough to have a heart attack, it will cost about £10,000 to treat. Meanwhile, a spinal injury received in Eastern Europe would set the uninsured back about £5,000 for repatriation and treatment. Travel insurance won't stop you getting injured but it will buy you peace of mind.

* For insurance advice, telephone Biba on 020 7623 9043.