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EnergyFive insurance myths - blown out of the water!
Filed under: Your Rights
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Whether you are looking for car, home or travel insurance, the huge number of policies available can make it difficult to find the best one.What's more, many of us are led astray by insurance myths that seem to make perfect sense but can in fact lead to us paying over the odds for cover or even being left unprotected should the worst happen. Here are five of the most common.
1. Insurers reward loyalty
You might think that insurers would offer their best deals to loyal customers. But that is not the case.
Instead, they reserve their most competitive deals for new customers and rely on their existing customers being too lazy to shop around once their policies come up for renewal. So don't agree to a new premium without seeing how much it would cost you to switch to a rival.
Even if you would prefer to remain with your current insurer, you can still ask it to match the best quote you have received elsewhere. And if the company refuses, you're probably better off elsewhere anyway.
2. You don't need travel insurance if you have an EHIC card
The free European Health Insurance Card (EHIC) entitles the holder to medical treatment in state run hospitals in any EU country (plus Iceland, Norway, Liechtenstein and Switzerland) at the same cost as a local – which often means it's free.
Every traveller to Europe should therefore get one and keep it on them – especially as some insurers will reject medical claims made by those without one.
However, the card should never been seen as a substitute for travel insurance, which covers costs incurred if EHIC treatment isn't free and private hospital treatment, as well as cancellation, baggage loss or theft and more.
Instead, they reserve their most competitive deals for new customers and rely on their existing customers being too lazy to shop around once their policies come up for renewal. So don't agree to a new premium without seeing how much it would cost you to switch to a rival.
Even if you would prefer to remain with your current insurer, you can still ask it to match the best quote you have received elsewhere. And if the company refuses, you're probably better off elsewhere anyway.
2. You don't need travel insurance if you have an EHIC card
The free European Health Insurance Card (EHIC) entitles the holder to medical treatment in state run hospitals in any EU country (plus Iceland, Norway, Liechtenstein and Switzerland) at the same cost as a local – which often means it's free.
Every traveller to Europe should therefore get one and keep it on them – especially as some insurers will reject medical claims made by those without one.
However, the card should never been seen as a substitute for travel insurance, which covers costs incurred if EHIC treatment isn't free and private hospital treatment, as well as cancellation, baggage loss or theft and more.
3. Third party car cover is cheaper than fully comprehensive
It seems logical that a third-party car insurance policy will work out cheaper than comprehensive cover. After all, it offers the holder significantly less protection.
But this is not always true, with younger drivers in particular often finding it costs less to insure their cars on a fully comprehensive basis.
The main reason for this is that insurers have noticed that motorists with riskier profiles often tend to opt for third-party policies and have reacted to this perceived increase in risk by driving up the cost.
4. You can claim for any item worth up to the overall policy limit
Home and travel policies generally stipulate a single item limit that will apply to any claims made.
If, for example, you have a watch worth several thousands of pounds, you may well find that your home contents insurer will refuse to pay out the full value should it be damaged or stolen.
When it comes to travel insurance, you should also check the baggage section of the policy to ensure that the single item limit is high enough to cover any valuables you plan to take with you.
5. It's ok to insure your car in a parent's name
Insurers often charge young drivers sky-high insurance premiums. Consequently, a lot of youngsters insure their cars in a parent's name and adding themselves as a named driver - a practice known as 'fronting' - to keep costs down.
However, 'fronting' is illegal and will also invalidate the policy, meaning that any claims made could easily be rejected.
If, for example, you have a watch worth several thousands of pounds, you may well find that your home contents insurer will refuse to pay out the full value should it be damaged or stolen.
When it comes to travel insurance, you should also check the baggage section of the policy to ensure that the single item limit is high enough to cover any valuables you plan to take with you.
5. It's ok to insure your car in a parent's name
Insurers often charge young drivers sky-high insurance premiums. Consequently, a lot of youngsters insure their cars in a parent's name and adding themselves as a named driver - a practice known as 'fronting' - to keep costs down.
However, 'fronting' is illegal and will also invalidate the policy, meaning that any claims made could easily be rejected.
