While insurance isn’t the most exciting thing to spend your money on each month, it can be an important expense to make sure you aren’t caught out in the event of an emergency.
Perhaps the most common policy that comes to mind when thinking about insurance is car insurance as all drivers legally have to hold a policy to drive on the UK’s roads.
However, there are myriad other insurance policies that you could consider getting. Plans that cover your home or pets are quite common (and quite sensible) but some others can be a bit more obscure.
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We look at the five insurance policies that you should have.
What insurance policies should I have?
Car insurance
Car insurance is mandatory if you are a motorist.
The cost of car insurance ballooned in recent years but has started to fall again, according to Go.Compare. The average cost of car insurance is now £416 – the lowest it has been since early 2023.
Ursula Gibbs, chief commercial officer at Compare the Market, said: “First things first, make sure you shop around and compare policies as this could save you hundreds of pounds each year.
“If you’ve not yet bought your car, or are considering an upgrade, it’s worth checking which insurance group a car is in before you buy it because this could bump up your premium.”
We list 18 tips on how to cut your car insurance costs in a separate piece.
Every driver on a UK road must have at least third-party car insurance. This covers you if you damage somebody else’s car or if you injure somebody else, but it won’t cover any damage done to you.
The tier above third-party is called third-party, fire and theft. This tier covers third parties if you damage their cars or injure them, but also covers you if your car is stolen or damaged by fire.
However, most drivers opt for a higher level of coverage: comprehensive.
Comprehensive car insurance is by far the most widely used car insurance cover. It provides protection if damage is done to your car in a collision, as well as covering third-parties.
It depends on the specific plan that you take out, but most comprehensive car insurance covers accidental damage to your car, chips, scratches, dents, and vandalism.
Buildings insurance
While it is not a legal requirement, it may be wise for most consumers to take out a buildings insurance plan. Many mortgage providers will insist you insure your home to make sure their investment is protected. This way they will not lose cash if they repossess your home.
Buildings insurance covers you for the physical structure of your home. This includes things like the roof, walls, floors, etc.
In the event that the structure of your home is damaged, from things like flooding, fires, storms, or vandalism, your buildings insurance will cover some of the costs of repairing and rebuilding your home.
A buildings insurance plan can help you avoid getting caught out by the potentially enormous costs of repairing damage to your home.
Home contents insurance
Once a buildings insurance plan is sorted, the next thing most people should consider is a home contents insurance plan.
Unlike buildings insurance, which covers the physical structure of your home, contents insurance covers the items inside your home, like TVs, beds, kitchen appliances, and computers.
Because the items in your home are not what your mortgage provider has invested in, they may advise you to get it, but it is rarely a requirement in the mortgage agreement.
You could make a claim on your home contents insurance policy if your belongings are damaged or broken from events outside your control, like a fire, storm, or flood.
The average cost of home insurance (which includes both buildings insurance and contents insurance) is £232 a year, according to Go.Compare, but will differ according to the size of your home, the number of residents, its location, the year it was built, and other factors.
Gibbs, from Compare the Market, said: “Whether you own your home or rent it, it’s worth considering some form of home insurance. If you’re renting, then contents insurance will protect all your possessions, such as laptops, bikes, phones and televisions.
“If you own your home, then you’ll want to consider both contents and building insurance. Building insurance will protect you in the event of a fire, burst pipe or severe weather damage, where parts of the house may have to be rebuilt.”
There are ways to cut the cost of your home insurance premium.
Travel insurance
The last thing holidaymakers may want to think about is what would happen if your suitcase is stolen, your trip is cancelled, or if you are involved in a medical emergency.
Nevertheless, it is important to plan for these eventualities to make sure that you won’t be caught out if they happen to you.
While the costs of having your suitcase stolen or needing to cancel your trip unexpectedly can be uncomfortably high, they pale in comparison to the potential expenses of a medical emergency, which can easily cost you thousands, if not tens of thousands of pounds.
For that extra peace of mind, make sure you choose the right travel insurance when you go abroad.
The average cost of travel insurance is around £25 for a single trip policy, according to Go.Compare, but can increase depending on your personal circumstances, age, the places you are visiting, and type of activity that you expect to do.
Gibbs warns against skipping travel insurance. She said: “If you don’t have it and something goes wrong – for example, if your trip is cancelled, you need medical treatment while you’re out there, or your belongings are stolen – you’ll need to pay for this yourself.
“Prices for travel insurance can vary considerably, so do your research and take out your policy before you travel, ideally as soon as you book your trip, so you’re covered for any unforeseen events, like cancellations.”
Pet insurance
If you are lucky enough to have a furry friend in your life, then it could be a good idea to take out a pet insurance plan.
If your pet falls ill or gets injured, a trip to the vet could potentially cost a hefty sum of money, but if you take out a pet insurance plan, the cost of treatment should be significantly reduced.
As well as medical circumstances, some providers will pay out if your pet damages someone else’s property.
The average cost of pet insurance differs depending on what type of animal you have. It is around £162 a year for a pedigree dog, and £136 for a pedigree cat, according to Go.Compare.
For dogs in particular the cost of insurance can become more expensive depending on the breed you have – for example the Dogue de Bordeaux is the most expensive dog to insure, costing around £334, while the cheapest breed is a Jack Russell, costing just £82.
