THE MONEY FILE: Get the best deal from insurance companies

Are you walking out in the world naked? Insurers try to scare you into thinking you are if you don’t buy their cover. The right policy is a suit of armour protecting you from the world's randomness – but what's necessary, what's nonsense, and how do you cut the cost?

I’ve given each major type a need score – of course, it’s a rough estimate, and varies for each individual. To state the bloomin’ obvious, the score assumes you actually have the thing being insured – so if you don’t have a pet, pet insurance is a zero.

• Car insurance – need score 10/10.

If you own a vehicle, the law says you need insurance even if you don't drive it, unless you get a Statutory Off-Road Notice to declare it off-road. Insurers take advantage by continually renewing, oft at ever-increasing prices. Regularly check if you're being overcharged. To cut the cost…

a) Get max quotes in min time. Different comparisons look at different insurers, so combine as many as you've time for. My current order is: www.gocompare.com, www.google.co.uk/carinsurance and www.moneysupermarket.com.

b) Check insurers they miss. Two big insurers are missed here, and can be competitive, so always add in www.directline.com and www.aviva.co.uk.

c) More than one car in the home? Comparisons don't search for multi-car discounts. Manually check www.admiral.com, www.directline.com and www.aviva.co.uk.

d) Don't assume third party's cheapest. Selecting comprehensive cover makes some insurers consider you a lower risk – this can outweigh the fact third party is lesser cover, so check both.

• Buildings insurance – need score 9.5/10. Contents – need score 8/10.

Mortgages require you to have buildings cover. Even if your mortgage is paid off, risking losing your home is a big gamble, so this cover is also high up the list.

Yet even then, only insure its rebuild value - the cost of rebuilding the property if it was knocked down. Many overpay by covering its market value.

Contents cover isn't compulsory, but risking all your possessions is, well, risky. Many under-cover, which risks you only getting a partial payout if you claim.

For the most quotes in the least time, try www.confused.com, www.comparethemarket.com, www.gocompare.com and www.tescocompare.com. Again, add www.aviva.co.uk and www.directline.com that they miss.

• Travel insurance – need score 8/10.

With cover from as little as £7, taking medical risks when you travel just isn’t worth it. Travel insurance gives medical cover abroad, which is needed outside Europe.

Even in the EU, while a free EHIC card gives medicals at the same cost as locals, that's not always free and you don't get cover for baggage, repatriation and many more. So why risk it?

For single trip cover, to find your cheapest use the www.moneysupermarket.com comparison. It can be as little as £7. If you go away two or more times in a year, get an annual policy. www.coverwise.co.uk is currently my cheapest pick, at £14-£26 for an individual, or £23-£40 for a couple under 60.

For more choices, including strong feedback providers or those for over-65s, see www.moneysavingexpert.com/travelinsurance.

• Breakdown cover – need score 6/10.

With modern reliable cars, breakdown cover is needed less. Yet done right, breakdown can be startlingly cheap, so the cost versus risk analysis still means that getting a policy is favourable.

You can often get big discounts on AA and RAC cover if you factor in the rebate of going via cashback sites like www.topcashback.co.uk or www.quidco.com. Alternatively, if you need full cover, www.autoaidbreakdown.co.uk is £39 a year for you and your spouse. Full info via www.moneysavingexpert.com/breakdown.

• Pet insurance – need score 6/10.

A cat’s cataracts operation can cost a whopping £3,000. But let's be frank - how crucial this insurance is depends on your attitude if your pet is ill. If you'd rip off your left arm to ensure they get all treatments, insurance should prevent hefty vets' bills.

To speedily compare deals for dogs and cats, benchmark a price with www.gocompare.com and www.comparethemarket.com, then add www.aviva.co.uk and www.directline.com.

Dog owners – a warning. By law, cats are free spirits. Dogs aren't, so if they cause injury or damage, you're liable. If you don't have pet insurance (or yours misses this cover), third party liability cover is max £25/yr from www.dogstrust.org.uk.

• Mobile insurance – need score 5/10.

As smartphones become pricier, insuring them in case of loss or damage is a stronger proposition. Ask yourself how likely that is. If you've never lost your phone in 10 years, you could save each month by 'self-insuring' in case of problems. If, like me, you're a loser (of mobiles, that is), insurance often adds up.

My top pick, mixing price and feedback, is www.insurance2go.co.uk at £70 a year for iPhones, or as little as £57 for Samsung smartphones.

If you've more mobiles in the family, switch to the Nationwide FlexPlus account at www.nationwide.co.uk/current_account/flexplus, which covers all the families’ phones for just £10/mth (£120/year). More options in www.moneysavingexpert.com/mobileinsurance.

• Warranty cover – need score 2/10.

Most warranties sold with electricals are hideously expensive. Shops may try to scare you into getting one when you buy ‘em. Yet if you look at the likelihood of breakdown, and the cost of the product compared to the warranty, it's often not worth it.

First, you've consumer rights which say goods must last a reasonable time. Goods may also be covered by home insurance, so check this too. If you do want a warranty, standalone policies are often cheaper. Try www.warrantydirect.co.uk, www.warrantyshop.co.uk and www.compareextendedwarranties.co.uk to see how it compares.

• Insurance for things you don't have a need score for - 0/10.

Shockingly, many people have money dripping out of their accounts each month unnecessarily. For example, here’s a tweet I received: "I've paid £16/mth for SIX YEARS for white goods we no longer have." So check your direct debits and standing orders now.

Free personalised video from Santa

There's a website that sends your friends and family free personalised online short video messages from Santa - cute for kids (and hilarious for adult recipients).

To do it, go to www.portablenorthpole.com and answer the questions, including the recipient’s age, name, where they live and more, plus a photo if you wish. Then fill in who you’d like it to be sent to as well as your details, check the site’s terms, and it’ll be sent via email to your friend.

Puma Hotels 40% off rooms

Book via www.pumahotels.co.uk/express40 for 40% off stays at any of Puma Hotels’ 21 four-star venues in England, Scotland and Wales, subject to availability. It’s valid for stays until 31 March 2014 (excludes Christmas and New Year), though you need to book by 31 Jan 2014. To book by phone, call 0800 014 2638 and quote the code EXPRESS40.

Sale rooms start at about £89 and include a three-course meal each, with a bottle of wine to share, plus breakfast the next day. Check-out’s also extended until 1pm for free with this offer (usually 11am), so you can have a lie-in.

Get Martin’s FREE tips and money-off vouchers emailed directly to you each week by signing up to www.moneysavingexpert.com/tips

Comments (1)

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12:08pm Tue 10 Dec 13

whatintheworld says...

having worked for a car insurance broker, my best advice would be to cut out the middle man. always check the price of insuring with a company directly.
if this is not possible, ask the broker who is underwriting the policy, then go ring that company yourself.

an example - middle aged, well behaved, female driver calls me (while working for the broker) to get a quote for her small, sensible hatchback.

i get a price on my screen of £X (this is the actual cost of insuring directly with the company). i tell the nice lady that the best price i can do £X + 70.

the lady says this is more than she expected, so i pop her on hold to "see what i can do".

i come back with a price of £X + 50.

the lady thinks shes just saved £20 and buys it.

she could have just asked who the underwriter was, rang the company directly and saved herself my fees.
having worked for a car insurance broker, my best advice would be to cut out the middle man. always check the price of insuring with a company directly. if this is not possible, ask the broker who is underwriting the policy, then go ring that company yourself. an example - middle aged, well behaved, female driver calls me (while working for the broker) to get a quote for her small, sensible hatchback. i get a price on my screen of £X (this is the actual cost of insuring directly with the company). i tell the nice lady that the best price i can do £X + 70. the lady says this is more than she expected, so i pop her on hold to "see what i can do". i come back with a price of £X + 50. the lady thinks shes just saved £20 and buys it. she could have just asked who the underwriter was, rang the company directly and saved herself my fees. whatintheworld

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