If you've ever had a car crash, a flight cancelled, fallen seriously ill or been robbed, you'll know how stressful these incidents can be. If you have insurance, the cost of repairs, medical treatments, travel changes or theft can be softened.

Insurance provides the money you need when things go wrong. But with so many companies providing different types of insurance, it's important to read the fine print, ask lots of questions and find the right policy for your needs.

Types of insurance

Here are the different types of insurance that you can buy:

You may also need to disaster proof your finances and financial documents.

Transferring risk

In life there is always a risk that things can go wrong. And if they do, you need money to meet your costs and avoid chaos in your finances.

Insurance is about managing risk. By taking out an insurance policy, you are transferring financial risk to your insurer, for a fee or 'premium'. Without insurance, you're taking the risk of meeting those costs yourself.

Insurance tips

Apply these tips and you're on your way to making good insurance decisions:

  • Shop around - Get quotes from different insurers and compare what they offer. Don't be afraid to ask lots of questions. If you're comparing features online see our guidance on using comparison websites.
  • Consider using a broker - An insurance broker can give you advice about your insurance needs.  You can search the National Insurance Brokers Association website to find an insurance broker.
  • Choose carefully -  Write a list of the things you need (i.e. what you want covered) and pick the policy that meets your needs.
  • Renew your insurance - Do this when your old policy expires or as your circumstances change. Keep track of your insurance renewals with the Know Risk app.
  • Work out how much you need - Do this when you start or renew your policy, so that you don't find yourself significantly underinsured. Insurance company websites have tools to help you work this out.
  • Check exclusions - Always ask what is and isn't covered by your policy.
  • Check the costs - You will pay a regular fee, known as a 'premium', for your cover. And when you make a claim your payout will be reduced by an amount, known as the 'excess'. Don't sign on the dotted line until you know all the costs.
  • Be honest with your insurer - Tell it like it is because your 'duty of disclosure' means you must tell the truth when you apply. If you leave details out, any future claim may be denied.

Making claims

There are some things you need to do when making an insurance claim:

  • Inform your insurer as soon as possible and include as many details as possible
  • Tell the whole truth
  • Provide all documents supporting your claim
  • Cooperate with the insurer and the people they employ to help assess the claim, such as investigators or doctors

Whenever you provide information to your insurer, you need to remember your duty of disclosure. If the information on your application or claim form is incorrect or misleading, your claim might be denied.

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Last updated: 03 Mar 2014

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