While price is a factor when it comes to choosing an insurance policy, what’s even more important is making sure your policy suits your needs. Knowing exactly what you will be covered for under a policy will help you choose the right one for you.
Inclusions & exclusions
Any insurance policy will outline exactly what you are covered for – what’s ‘included’ – and exactly what you’re not covered for – what’s ‘excluded’. Make sure you know what these are before you sign up to a policy because you won’t be able to make a claim on anything that is excluded.
Questions to ask yourself: What am I covered for and not covered for under this policy?
Key terms can be defined differently from one insurer to another, which can affect your ability to claim. For example, the word ‘family’ may be defined differently across insurance providers. This could mean your sister wouldn’t be covered under a travel policy you sign up to, if your policy defines ‘family’ as your spouse and two children.
Questions to ask yourself: Have I read through and understood the definitions of each item in my policy?
How to manage risk
You’re often required to manage your risk in order to be eligible for a payout. That means managing any known risks that could affect the chance of something unlucky happening to what you have insured. For example, if you buy home insurance, you may be required to keep your roof in good repair before you can claim cover for storm damage.
You may be able to get a discount on your insurance by managing risk well. For example, you could get cheaper home insurance if you’ve secured your home with window locks and deadlocked doors.
Questions to ask yourself: Are there any conditions that need to be met for the insurance to be valid?
Individual or overall limits
If there are any dollar limits to what or how much you can claim, these will also be outlined on a policy. If there are dollar limits to your cover, your insurance provider will only provide financial compensation up to a certain amount. Your policy may have limits for individual items, for example, you might be able to claim up to $10,000 in hospital expenses on a travel policy, or an overall limit.
Questions to ask yourself: What are the limits or restrictions on what I can claim?
Under some insurance policies, you need to wait for a certain period of time after buying the policy before you can claim cover you’re eligible for. For example, you might need to wait a year before you can claim a dental visit on a health insurance extras policy.
Questions to ask yourself: Are there any waiting periods?
Premium costs & grace periods
It’s important that you’re able to afford the policy you sign up to because if you don’t pay your premium, your insurer may automatically cancel your cover without notifying you that you have missed a payment. If your payment is more than 14 days late, your insurer can also refuse to pay a claim.
Questions to ask yourself: Is the cost of premiums financially viable? Does my insurer offer a grace period?