WITH budgets tight during a crippling cost of living crisis, avoid wasting over £900 a year from these common insurance mistakes.
Getting yourself covered is important so you’re not faced with big bills when things go wrong.
You could be wasting money on insurance unnecessarily, money expert Sarah said
But simple errors when applying for cover could see you shelling out unnecessarily, said Sarah Hargreaves, senior personal finance analyst at Hargreaves Lansdown.
She’s one of HOAR’s Squeeze Team experts, here to help you with your money problems while times are hard.
If you’re worried about how to make ends meet, are struggling to pay off your debts or don’t know how best to manage your cash, get in touch by emailing [email protected].
Here are her top tips for saving cash while buying insurance.
Buying extended warranty for white goods – wastes £40 a year
If you’ve bought an appliance like a new washing machine or fridge, you can buy an extended warranty.
It is a policy that covers you for the cost of repairs that need to be done after the manufacturer’s guarantee is up.
You’re generally covered under a manufacturer’s warranty for up to two years.
But buying an extended warranty for white goods typically “isn’t worth the money”, Sarah said.
That’s because you have certain consumer rights when you buy an item anyway, regardless if you have cover or not.
For example, you are entitled to get a refund on an item if it’s faulty within six months after you made the purchase under the Consumer Rights Act 2015.
Sometimes, retailers extend the manufacturer’s warranty longer than two years – sometimes you can get five years of total coverage for free, according to Money Helper.
Read the extended warranty cover small print carefully, Sarah said.
“It may not cover you for new parts or for any call out fee, so you could still be landed with the lion’s share of the costs if something goes wrong too,” she said.
Buying boiler cover – wasting £300 a year
Buying boiler cover might be tempting.
No one wants to be stuck in a cold home for days – or even weeks – if their boiler breaks down.
But it’s likely a waste of your money, Sarah said.
You’ll pay nearly £300 a year on average for it, but only around three in 100 policyholders recoup that cost, Which? research found.
Some policies won’t pay out if your boiler is older than six years, or you’ll only be able to get a maximum of £500.
“If you have a relatively new boiler, or your home insurance already provides cover, then it’s particularly unlikely to pay off,” Sarah said.
Pushing your quote up in application – wasting nearly £500 a year
When you apply for an insurance policy, you’ll need to answer questions and fill out forms.
You’ll need to do your research beforehand to understand which questions could be pushing up your quote.
For example, the way you write your job title could have an impact.
Fast food delivery drivers are charged £1,369 a year on average, according to GoCompare research.
In comparison, couriers pay £908 and delivery couriers £890, but these titles could all describe the same job.
That means you could save up to £479 a year with a simple job title tweak.
“Nobody is suggesting you bend the truth, but knowing the answers that make the difference can help you make any changes you need,” Sarah said.
Not reading policy small print – wasting your ENTIRE premium
Always read the small print on your policy.
It’s important to get to grips with exactly what you’ll be covered for.
“For travel insurance, for example, you may want to be covered in case there are strikes, but while some policies will cover industrial action, others won’t,” Sarah said.
It could mean that you’re left high and dry – and potentially hundreds of pounds down.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
Paying for the same cover twice – wastes £70 a year
It’s a good idea to check if you’re already covered on your phone or other gadgets before buying insurance for them.
That’s because you may for covered if something goes wrong through your home contents insurance.
It means you can avoid paying for policies you don’t need – mobile phone insurance costs you around £70 a year usually, Sarah said.
“Comb through your existing cover, and check whether you actually need it,” she said.
