Published on July 21st, 2013 | by Pete0
Insurance – where to draw the line
Insurance – can’t live with it, can’t live without it…or can we? Thinking about insurance and whether to take it out can be really tricky decision. Do you really need to take out no claims bonus insurance, is it necessary to insure your insurance policy? What about mangy old Fido – is it worth spending a tenner a month insuring him when most pet insurance companies seem determined to find any loophole possible to avoid paying out?
Like me, you may have had a phone call from the lovely people at Sky television, telling you that it might be a good idea to insure your sky box, in case that decides to give up the ghost. So concerned are they, that they call to make sure that you are aware of the option of giving them more money every month. That sounds a bit dismissive, and for some people they may view their sky box as important enough to warrant being insured. I am just not one of those people.
Insurance can of course be very helpful and beneficial, especially if you are of the opinion that you may well need the cover you are paying for. I am ridiculously clumsy, and so accidental damage cover as part of our contents insurance was vital. It has also come in very useful on two different occasions. Firstly, I was doing some ironing and dropped the iron on the carpet, burning a lovely iron shaped hole in it, despite my cat like reflexes in picking it up. We contacted our insurers and made a claim, and got a replacement carpet, which I am enjoying right now. Secondly, my wife and I were in Sweden enjoying the nuptials of our friends, when I decided I could be trusted to look after the camera, which after a few too many beverages of the alcoholic persuasion, dropped out of my pocket into a nearby bush. Classy I know. Anyhow, the insurance company furnished us with a new camera – I have suggested to my wife that she owes me a thank you for the new camera – she disagrees with my perspective on this topic.
My general approach to insurance is that it should be reserved for things that are either legally binding (such as car insurance) or things that you could not afford to replace with the use of an emergency budget, should you need to (for example, sky box insurance). As for things like pet insurance, another option is to simply put the ‘premium’ aside yourself every month, so you can access it should your beloved moggy need a trip to the vet, but if this is not necessary, then you still have the money to use however you want to.
I doubt most of us could afford to replace our home, or find more cash if something went wrong with the wedding we were organising, and on that basis, I would say that they are things that might well be worth insuring. At these times, if things go wrong we do not want to be worrying about how we are going to recover – it’s nice to know that the ‘difficult to price’ parts of our life are protected. Ultimately, you may decide that you could not cope if the sky box blew up one day, and therefore insurance would be appropriate. Everyone has different ideas about what should be protected and what should not – but don’t just blindly insure everything!