Money: A rich vein for insurers

Clare Francis on how to decide what cover you need

Most of us don't have enough essential insurance - the sort of home cover and life insurance that will make a massive difference if things go disastrously wrong. Recent research by AXA insurance revealed that one in four households does not have any home insurance.

But that doesn't stop insurers falling over themselves to sell a much wider range of "just in case" insurance policies. And if you are the worried type and buy up just about everything going, the costs for an average family can mount up to more than pounds 7,000 a year (see box).

Assuming you have got motor, home and life cover - the most essential insurance for many people - what should you buy next? You need to make a list of your priorities; for many people this might be a policy to protect your income if you are off work for a long time or become disabled.

So how do you decide what is a priority? Peter Staddon, technical services manager at the British Insurance Brokers Association, says: "The biggest investment you make is the purchase of your home, and that needs to be protected. Work out whether you need income replacement insurance.

"Also, a lot of people are under-insured on home insurance as they don't realise the value of their assets."

Under-insurance is often unintentional - you may have taken out a home contents policy several years ago and simply renewed it each year. In the meantime, you have probably acquired a lot more possessions and the value of your jewellery or antiques may have risen sharply.

Most advisers consider life insurance to be an essential buy, and many recommend that you take out enough insurance to cover between five and 10 times your annual household income.

But in fact you don't need life insurance cover unless you have dependents. If you are single and have a mortgage, some lenders insist on life insurance. If yours doesn't, you can bypass this cover if you think that the sale of your home would raise enough cash to repay your outstanding mortgage.

Mr Staddon's favourite little-known tip is legal expenses insurance, which is usually offered as an add-on to home contents insurance or motor insurance. "It only costs pounds 15 or pounds 20 and it gives you the power to take action against others - and you get a free legal advice helpline."

If you do have the money to go beyond core insurance policies, some enterprising firm will have a policy for your individual needs. At the more extreme end of the worry spectrum, Grip, an off-the-wall insurance outfit, offers cover against being converted into a werewolf or a vampire. It also has a special millennium policy.

If you choose to take out this cover, Grip will pay out pounds 5,000 in compensation should you be hospitalised because of alcohol poisoning, arrested or unable to "perform" on New Year's Eve.


These figures are based on an average family living in a four- bedroomed detatched house in Ipswich. The father is a 45-year-old IT consultant and the mother a 45-year-old receptionist. Both are non-smokers. They have three children: a daughter, aged 20, in her second year at Leeds university; a son of 17 who is in full-time education and has just passed his driving test; and another son, aged 10, who is still at junior school.

They have a Ford Mondeo, insured in the father's name and a Renault Clio, which is insured in the mother's name and has the two older children as named drivers. Both have full no-claims bonuses.

House and contents insurance

AXA Insurance: up to pounds 35,000 contents, all risk pounds 119.00

Life insurance

Scottish Amicable: 10-year joint policy, level protection, to pay out pounds 100,000 pounds 552.00

Car insurance

Admiral: 1998 1.8 litre Ford Mondeo, fully comp

for any driver over 25, pounds 100.00 excess pounds 262.00

1995 1.1 litre Renault Clio pounds 512.00

Student house insurance

Saxon Direct: postcode LS2, pounds 2,000 contents cover,

pounds 1,200 extra cover for a computer pounds 105.00

Private health and dental cover

Bupa: local care medical cover pounds 2,591.06

dental cover pounds 661.68

Travel insurance

Columbus Direct: annual worldwide family cover pounds 145.00

Pet insurance

Pet Plan: pedigree dog pounds 133.20

cat pounds 61.20

School insurance

Norwich Union: school plan taken out by the

school to protect against injuries and accidents pounds 2.00

Income protection

Bupa: pounds 605.94

Critical illness

Bupa: pays up to pounds 20,000 for each adult and up

to pounds 15,000 for each child pounds 1,281.68

TOTAL: pounds 7,031.76

Start your day with The Independent, sign up for daily news emails
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions