What to Expect From Your Insurance
We take out insurance on our homes, our cars, our possessions, life and health - all manner of things. Some of it, like car insurance, we have to have; some we take out to provide for our families and ourselves in case of death or disaster. In today's society, insurance for all kinds of things is a fact of life. We hope that if we ever have to make a claim, it'll be settled quickly, fairly and fully. But what should you expect from your insurance?
Types Of InsuranceInsurance falls into two categories - general insurance and pure protection insurance - and both are regulated by the Financial Service Authority. Think of general insurance as cover for everyday things - your car, home, health, pet insurance and some types of travel insurance (with the exception of travel insurance sold in conjunction with a holiday). Pure protection deals more with the future, things such as term assurance - also known as life insurance - critical illness insurance and income protection insurance.
Insurance BrokersMost people purchase insurance through brokers. If they have a financial interest in an insurance company (or vice-versa), they must legally declare this to you at their presentation. They must also state what range of insurers they're offering policies from. In some cases that will be a wide, sometimes just a few and in other instances only one. They should also tell you about their services and give details of the policy they're offering you before you buy. These days many brokers, such as the AA, advertise on TV and online and this can be an easy way to buy for many people and can sometimes prove cheaper too.
More than that, they must only recommend suitable coverage and not try and sell you more than you need simply to bump up premiums.
You can also buy directly from an insurance company, although you should always check around for premiums and coverage first. Additionally, take the time to investigate the company. Are they sound? What have their customers said about them? It's your money and your insurance - you want to know it's safe.
ComplaintsWhen would you need to complain about your insurance? There could be a number of different reasons, such as if they didn't give you enough notice about contract changes, or gave you misleading information. If you have a complaint, contact the insurance company.
It doesn't happen often, but should your insurance company go out of business as you have a claim, you can go to the Financial Services Compensation Scheme (FSCS) for compensation. It can't always cover all your loss however, so if your claim is large, you'll have to join the company's creditors and file for payment.
The FSCS covers compulsory insurance in full. With non-compulsory insurance (such as home insurance), it will pay the first £2000 of your claim, then 90% of the rest. With things like pensions, they'll cover 90% of the claim.