Factors to consider before buying General Insurance

There is a myth that finding the best insurance in the town is a tough task. Whether you’re familiar with finance and insurance terms or not, making a decision to buy a suitable insurance still makes you think a lot. The easy way-out is to follow the process and go step by step. You don’t need to look at the available market options; however you have to stress upon your needs to secure your valuables on the basis of premium paying against it. There’re lots of insurance options available in the market, choosing one might be confusing. There is an option to seek advice from a professional adviser but there is no guarantee that your concerns and needs will be put forward at its best. Even after having a professional advise, there is a possibility to get the inappropriate cover and sometimes overpaying premiums. In the process of seeking advise you have to rely upon another person’s approach towards your circumstances. You can eliminate all complexity and make your decision yourself just by following these few easy steps.

Step 1: Know your needs

It’s utmost important to know your needs. You should always put your interests at the centre, to determine your needs according to your circumstances. Analysing your circumstances is the key factor. Example, if you have purchased a new house, that you want to put on rent and you also have some contents in that house then you have to protect your property and the contents inside it. You should look for the insurance policy which will cover these two at the same time. It is very important to check the extent and limit of the cover for each particular of the insurance policy. You should also be aware of the worth of your property, contents or car and how much risk it involves in its possession and its daily use. Insurance is all about risk and its protection therefore it is your responsibility to calculate the worth of exposed risk. Once you know it then you are half way through.

Step 2: Find and Compare the specialist

Once you have understood your specific needs then the next step is to find the specialist to cover your risk. The specialist is called the insurance company who can cover your risk in the most efficient way. Finding the specialist is very easy process. You just have to shop around and look at the detail of their insurance policies. You can use the marketplace like Aboundnet to compare many products at the same time, where you get to analyse insurance covers from different insurance companies for your circumstances. Once you have shortlisted the insurance policies then next step is to compare their extent of the cover, limits and exclusions. Pay attention to cover, limits and exclusions as these terms never get highlighted when policies are promoted or on sale. You find these terms in the policy wordings which you must read before buying the insurance.

Example: (Content Insurance) - Company A and Company B offer to cover accidental damages for your contents. Both companies have list of exclusions. Company A has a specific exclusion that they don’t cover damages to you contents caused by your pet, however Company B’s policy is silent about this. It means Company A will not accept your claim for any damages caused by your pet but Company B will cover accidental damages including caused by a pet because they don’t have any such exclusion. This becomes an important factor in your decision making if you have a pet at home. In such scenario Company B’s policy would be more suitable for you contents insurance.

Step 3: Scan through Premium and Deductibles

After you have shortlisted couple of insurance policies from different insurance companies, now is the time to compare the premium and deductibles at the event of a claim. Deductible is also called Excess. Deciding over payable premium and Excess always depends on individual’s risk exposure, risk appetite and premium payment capacity. Now you can minutely compare among different shortlisted insurance policy. You just have to look that which insurance policy is the most economical for you with the almost the same cover.

When you have gone through the above three steps then you’re sorted and would have narrowed down to the best suitable and economical insurance policy for yourself.

It is so simple and easy!

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