When buying a new house or car, or planning a holiday, insurance might not be the highest priority on your list, but it should definitely be near the top. While insurance is possibly not the most exciting part about moving home, purchasing a new motor or jetting off abroad, it is nevertheless incredibly important, as it gives you peace of mind that should something go wrong, you will be well looked after and not left out of pocket.
Some insurance is legally required
You are required by law to hold some types of insurance – with car insurance being a prime example of this. However, this is in no way a bad thing because if you didn’t have car insurance, you could be hit with sky high costs after an accident. While no-one likes to think about being involved in a collision, securing a good car insurance policy means that a smash won’t leave you with financial worries at a time when your mind should be on other things.
Other policies are hard to go without
While other policies are not needed by law, not having them could make things quite difficult. For example, people who do not opt for home buildings insurance are likely to find it impossible to find a willing mortgage lender, with this type of cover being required for such schemes.
What’s more, not having home buildings insurance could prove extremely costly in the case of an incident. While insurance may not seem like the most important thing while everything is going smoothly, if something should go wrong not having it means that you could be left severely out of pocket.
There are some types of insurance that are optional
However, there are other types of insurance that are completely optional, like home insurance, travel insurance and health and life insurance. While these are not legally required, making the risky decision to go without could have serious financial consequences should anything go wrong.
Home contents insurance
To begin with, home contents insurance, unlike buildings insurance, is not a requirement of mortgage lenders, meaning that some people are at risk of failing to insure their possessions. However, some people may find that if their valuables were to break or get stolen, they would either be unable to afford to replace them all, or doing so could nearly break the bank.
Contents insurance takes this worry away, giving people the peace of mind they will not be caught short should some of their most valuable possessions go missing or break. Not only should homeowners be conscientious about taking out home contents insurance in the first place, but they also need to make sure they accurately evaluate their possessions so that in the event of an emergency, they have the right amount of cover to replace their belongings.
Why travel insurance is a good idea
There is little worse than something going wrong in the middle of a long-awaited holiday, whether this is a medical problem or another sort of emergency with the potential to leave you out of pocket and stranded in an unfamiliar country.
It is particularly important for people who have pre-existing medical conditions which could result in sky high medical bills in another country. While the European Health Insurance Card will cover some of the cost of medical bills in some countries, it still has the potential to leave travellers with much less money, and only entitles them to state care.
People who need hospital treatment in the US, for example, could be faced with sky high medical bills of hundreds of thousands of dollars in just a few days. Travel insurance covers all this, however, and also entitles the policyholder to private care meaning that you know you will be well looked after should anything not go to plan during your holiday.
Health and life insurance
Health and life insurance are other areas of cover that, while it is not compulsory to purchase, are extremely valuable. Health insurance makes sure that if you should fall ill, you and your family won’t have extra financial strain to worry about, but can get on with recovering.
Life insurance is priceless in that it ensures that your loved ones will be looked after should the worst happen. While no-one likes to think about this difficult time, making sure you have such a plan in place gives you peace of mind that your family will not have to struggle financially when the time comes.