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How Under Insurance Will Increase Your Premiums

03.09.2015 By Elliott Insurance Insurance News

Most people understand the importance of having insurance in place as it protects you financially against the unexpected. However…

Most people understand the importance of having insurance in place as it protects you financially against the unexpected. However, it’s easy to choose minimal cover in order to save on your premiums or even go through periods where you don’t have insurance in place at all. This not only puts you in financial rist but also affects the price of premiums in general.

Working Together To Keep Premiums Low

The simple truth is that the more people who take out insurance policies, the cheaper premiums can become. This is because the insurer has a larger premium pool when more people take out cover and can pass these savings onto the consumer. As insurance becomes more widely used and people take out appropriate cover for their needs, this can in turn lead to a reduction in the cost of premiums. Under insurance within the community not only impacts on the individual financially if something goes wrong and they have no cover, it also impacts on the cost of premiums in total.

Make Sure You’re Protected

It can be tempting to take out minimal insurance cover as it can mean cheaper premiums, although with reduced cover. However, although you may notice short time benefits to this strategy, over the long term it can lead to serious financial difficulties if it comes to claim time and you haven’t adequately protected yourself with the right insurance. When things go wrong, they can go seriously wrong and you don’t want to be in a situation where you’re thousands of dollars in debt.

A good example of an area where people can easily under-insure is home and contents insurance. Home and contents insurance can protect you against unforeseen incidents and disasters, such as flooding or fire, and also protects items within the home from theft or loss. Some people significantly underestimate how much their home and belongings are worth and find themselves in a situation where their insurance doesn’t cover the cost of replacement or repairs. When it comes to home and contents insurance, make sure you have enough cover for both your home and possessions. Always speak to your insurance broker about your specific circumstances, such as any especially expensive items within the home, to make sure you have the right level of cover in place.

Rather than finding out too late at claim time that you’re under-insured, have a chat to your insurance broker about your specific situation and they will be able to advise you on the best insurance package for you. Insurance brokers are experts in the insurance field and know what to ask and what to look for to make sure all bases are covered. If you’ve chosen to under-insure in order to save some money in the short term, have a think about the long term implications of this decision and whether you’re willing to use your own money if something goes wrong.

To discuss your insurance needs or for any other questions, contact Elliott Insurance Brokers on 1300 635 315 today for more information.