In our recent survey, we found that 68% of people are more worried about their finances now than during the pandemic. The rising costs of just about everything are causing people to make financial changes wherever they can in order to leave a little extra in the household budget for energy bills and food.
Our recent survey also found that over a fifth (21%) of UK adults are considering or have already reduced the number of insurance policies they have, or have reduced the level of cover they have, in response to the ongoing cost of living crisis. While we recommend shopping around to find the perfect product and compare prices, it’s important to make sure you have the right level of cover too in case you do need to make a claim.
We’ve compiled some tips on how to make small changes that may save you money on your insurance, whilst ensuring that your needs are still suitably covered.
Review your policies and their terms
Some insurance policies, like car insurance, are required by law, so you must make sure you have the right cover in place if you have the use of a vehicle. Other insurance policies are non-essential, with no legal responsibility to be covered.
However, not all non-essential policies are worth cancelling. For example, cancelling pet insurance may seem like an easy method of saving money, but in the event your pet becomes unwell, the cost of the vet bills will need to be paid out of your pocket, which can easily mount up.
For policies that you think are a must-have, there are some simple changes you can make to help ease the cost of the policy, without jeopardising your level of cover. If you’re able to pay your premium in full at the beginning of the policy, rather than going for monthly payments, you will reduce the overall cost of your insurance, as monthly payments will include also include a charge for interest.
Another simple method for reducing costs is to increase the excess of the policy. Agreeing to pay more excess may reduce your premium, but it’s important to ensure that the excess is still affordable in case you do need to make a claim.
Remove unnecessary add-ons
Insurers offer a variety of different add-ons to their standard policies to provide an enhanced level of cover. For example, home insurers may charge an additional amount for legal expenses, accidental damage and personal possessions, which you may not consider to be a necessity.
Having the security of these add-ons can act as a nice safety net, but when looking to cut costs, it’s a good time to question whether you really need these extras. Think about what you really need and check that you don’t have the same cover elsewhere; why pay extra for personal possessions insurance if your high-cost personal items are insured individually?
Cancel any old policies
Like subscriptions, insurance policies can mount up over the years, so it’s a good idea to check your bank statements to see if you’re still paying for any policies that you may have forgotten about and no longer require. Common examples of this are student insurance long after you’ve left University, or mobile phone insurance for an old handset that you no longer use.
Compare costs and switch
When your policy is due to end, it’s always worth shopping around and reviewing your levels of cover to ensure that you’re getting the best value for money. Insurance providers often have deals on cashback sites too, which is another great way to save money with your policy.
Whilst using comparison sites can be an effective way of whittling down to the best value policies, it’s equally as important to check customer reviews to make sure that you’re dealing with a reputable company. Often you won’t speak with an insurance company until you need to make a claim, so knowing that the provider would handle your claim efficiently by reading about others’ experiences is a great way of getting that extra piece of mind.
You are able to cancel an existing policy midway through if you decide it’s unnecessary or if you’ve found a better deal elsewhere, however, it's unlikely that you will get the money back for the remainder of the term. The provider may also charge a cancellation or administration fee, or both, so watch out for this. If you have any add-ons, you may still have to pay for these after you cancel the policy. The policy documents you were sent when you bought your insurance should have all the details on this as part of their terms and conditions.
We’d love to know whether you’ve considered changing your insurance policies as a result of the cost of living. Why not join the conversation over on our Instagram account or Facebook page, and tell us what changes you’ve made.