W hat insurance policies should I have?

With household finances, it’s easy to see why you may think some insurances are dispensable.

But before you decide to give any a miss, it’s important to understand which ones will make you financially stronger and the ones you can do without. Our money expert, Kalpana Fitzpatrick, discusses the policies everyone should have.

HOME INSURANCE

If you’re a homeowner, legally you need buildings insurance as a condition of your mortgage. Contents insurance is optional, but before you decide to forgo this consider how much it would cost to replace your possessions if there was a theft, fire or accidental damage. One in four households* do not have home contents insurance, leaving them at risk. If you’re renting, then it’s still important to protect your possessions, although buildings insurance is the landlord’s responsibility.

LIFE INSURANCE

If you have dependents who rely on your income, then life insurance makes good sense. If you get seriously ill or die, this policy will pay out a tax-free cash lump sum to your loved ones. No one wants to think about dying, but this insurance is important to give your family financial security.

PET INSURANCE

According to the RSPCA, 44% of UK households have a pet, yet millions of cats and dogs are uninsured, leaving owners liable for vet bills. Surgery for a cat’s broken tibia, for example, can set you back £2,000*. The cost of a policy depends on your pet, its age and type of cover, but the average premium is around £145** a year.

TRAVEL

If you’re going away, whether abroad or staycation, insurance is a must. It can protect you against lost items and cancellation as well as medical costs abroad. Almost nine million holidaymakers go away without cover, meaning they could be out of pocket if there’s an accident or the holiday is cancelled***.

Insurance may cost as little as the price of a meal, but should you need an air ambulance from Majorca, you could pay more than £25,000.

CAR INSURANCE

If you’re a car owner, then legally you need insurance. But you can choose the level of cover, depending on the level of protection you want.

WHAT YOU DON’T NEED

A salesperson might try to convince you that you need extended warranties but your purchase will have a manufacturer’s guarantee and you’re protected under the Consumers Rights Act 2015. And, for example, a mobile phone should be covered with home contents insurance.