Basic Insurances

You know you should have insurance, but with the costs of most insurances increasing every year, it starts to get really expensive.  

So why should you have insurance?  And what is it for?

I will be honest here - I don't get insurance like I get taxes, which I suppose makes me rare because a lot of you don't get either.  I'm no expert in insurance, but there's times where I have heard that people haven't got the right cover and insurance hasn't helped.  Reading a PDS (product disclosure statement) that is all in fine print and 50 pages long is not my idea of fun, however it does give you the best understanding of what you are buying.

Insurance is a way of reducing your risk that you will lose that particular item.

There's lots of things you can insure, and lots of things you should ensure, and then some things that insurance companies will talk you in to, that you may or may not need.

Let's talk important ones first.

- House and car insurances.  If you are like me, you use your home and car nearly every day.  So what if one breaks?  The car stops working, or the house is burned down?  Having insurance (with a good insurance provider) means that you will be covered for any loss that might happen.  It's important to cover yourself for the right amount of insurance so that you can get paid by the insurance company to fix the issue.

- Life insurance.  When you die, what will you leave behind?  Family, debts, and bills to pay?  Having appropriate life insurance means that your family will have a chance to pay out your debts and live a little without having to work.

- Income protection insurance and TPD (Total and Permanent Illness or Death).  What happens if you get an illness and can no longer work?  Having an insurance policy that can help you pay the bills and the mortgage will reduce your stress.

Some non-day to day insurances you might want to take out if your circumstances are right:

- Travel insurance.  Getting sick overseas is not fun, and having the right cover means that you will get the treatment you need, or just have some cash available to pay for some more clothes if your suitcase is destroyed or have somewhere to stay if a volcano shuts down airports for a week or more.

- Contents insurance.  This is to cover the cost to replace your household furniture if it is ruined due to specific circumstances. You may be able to add some personal items (such as jewellery) to your contents insurance.

- Landlord insurance.  This is if you own a property that you rent to others.  It will help you cover rent if the tenants default, meaning you can still pay the mortgage payments.

- "Toys" insurances - such as boat / caravan / camper trailer.  Having insurance to cover your toys means that you may be able to cover the cost of replacing them if something bad happens.

Now the "dodgy" insurances (be careful what you sign up for!)

- Pet insurance - some policies will cover up to 80% of your costs for a year, and others will only cover certain events.  Be careful if you choose pet insurance that you know what you are covered for.  Some people will find it cheaper to set up a separate bank account just for their pet bills.

- Funeral insurance.  You will die.  And in most cases, you will have a funeral.  It's great to know that this is covered, however insurance is tricky - you could end up living for 20 more years and paying thousands more dollars to the insurance company than to the funeral director.  May be reach out to the funeral home instead and see what options there are.

If you run a business you may need 

- Public Indemnity - for advice that you give

- Public Liability - for people on your premises

- Workers Compensation - for your workers

- Business insurance - such as covering broken windows, cyber security, audit costs, loss of income, etc.

I highly recommend talking to a good broker to see what your insurance requirements are, what cover you need and why.

Be realistic with your risks (what's the worst that can happen?) and make sure you can easily find your Excess amount if you need to pay the insurance company for the fixes they do on your behalf.