It is very possible to be too careful. At the same time, the cost of not being careful enough can, literally, be ruinous. You, therefore, need to use protection mindfully. In particular, you need to review it regularly so that your cover is always meeting your needs. Here are some tips to help.
Medical bills can be extremely high
Even though the UK has the NHS, it can still be worth looking at medical insurance. This may allow you to bypass NHS waiting lists. It can also get you access to treatments that might not be available on the NHS. Dental insurance might also be worth considering for essentially the same reasons.
If you have pets, then any medical treatment they need will need to be funded privately. Insurance can help a lot here. Keep in mind, however, that insurers may decline to cover pets for conditions that are known to be a common risk for their breed.
They may also decline to cover chronic medical conditions (beyond the initial treatment). This is another good reason to make sure you either buy a pet from a reputable source or adopt one from a shelter.
Legal bills can be crippling
One of the harsh realities of life is that it is entirely possible to be blamed for something that wasn’t your fault. An even harsher reality is that defending yourself can be very expensive. In fact, without insurance, it can be too expensive to be practical.
That means, any time you have legal exposure, you should definitely think seriously about covering yourself with insurance. Drivers are required to have insurance. Cyclists and pet owners are not but could benefit greatly from it.
Homeowners should take the issue of legal exposure particularly seriously. Quite bluntly, if you own a home you have an asset. More specifically, you have a valuable fixed asset that can be sold to pay compensation and/or legal costs. That can make it worthwhile for someone to pursue a case they might otherwise have ignored.
You may need multiple policies for your home
Assuming you’re a homeowner, you’ll almost certainly need at least two home-related insurance policies. Usually, the building itself is covered separately from its contents. Both policies may (or may not) be issued by the same company but they will be issued and treated separately.
Buildings insurance can be more complicated than you might initially think. For example, if you live in a flat, you would need to check your liability (if any) for communal areas. You’d then have to make sure that this was covered by your insurance. This might involve having a standard policy extended.
One of the key points to remember about buildings insurance is that you should insure your home for what it would cost to rebuild, not what it would cost to rebuy. This is because you already own the land. That often accounts for a substantial portion of the purchase price. Insuring your home for more will increase your costs without any gain.
Another point to note is that standard buildings insurance may not cover damage you caused by accident (for example when doing DIY). You may need to extend your policy or take out separate cover.
When taking out contents insurance, you need to check for categories of items that are excluded or limited. For example, an insurer may only cover a certain quantity of cash. They may also restrict cover on items such as jewellery and electronics unless the items you own are individually registered with them.
Home-contents policies may also not automatically cover outbuildings such as garages and sheds. Again, you may need to extend your policy if you want to have these protected.