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Consumer - Home and Motor Insurance

Tuesday, 17 March 2009

Tina spoke about Health Insurance on the show on March 4th and is now going to explain two of the more common insurances acquired by our viewers - home and motor insurance. Tina has carried out a price comparison and also gives us some top tips when purchasing these products.

Motor Insurance
If you have a car, by law you must have at least third-party insurance.

Burglaries and similar crimes traditionally rise as economies worsen so with that in mind we as consumers should be reconsidering our insurance products and reading the small print to ensure we are covered for all events.

There are insurance products for virtually everything out there and so many companies offering different deals. With the prices varying greatly from company to company Tina has carried out a price comparison of five of the leading Insurance Companies that provide Motor Insurance.

Types of motor insurance

There are three basic levels of motor insurance.
. Third-party cover - this pays out for claims that other people make against you for damage or injury caused by your driving. If you have a car, by law you must have at least third-party insurance. It is a criminal offence to drive in a public place without third-party insurance.

. Third-party, fire and theft cover - in addition to third-party cover, you can claim for loss or damage to your own car as a result of fire or theft.

. Comprehensive cover - this gives you third-party, fire and theft cover and also covers damage to your car, no matter who is to blame. It costs more than basic cover but also usually includes other benefits such as: windscreen and glass cover, cover for damaged or stolen personal belongings - this usually applies to items stolen from a locked boot or glove compartment. The amount you can claim depends on your policy, recovery service and emergency breakdown assistance, driving other cars - this provides you with third-party cover when driving someone else's car, replacement or hire car - the cost of this is covered if your own car is off the road as a result of an accident

Tina's Top Tips

1. The cost of your cover will depend on the level of cover you choose i.e. third party fire & theft costs more than third party cover only, so think about how often you use your car, for what purpose and if anyone else uses it.

2. Whether you have a full or provisional licence will also affect cost as will your age and gender, how many years you have been driving and if you have driving convictions or penalty points. So get a full licence and drive carefully.

3. If you have a full five-year no claims discount it can cut your premium by 50% or more. Where you live can affect cost as can keeping your car in a garage plus the age, model and value of the car. Bear this in mind if importing a car or if buying an expensive car with a big engine, or if the car you are buying is the model most often stolen.

4. If switching to a new insurer make sure your no-claims discount can transfer with you to your new insurer, so you're not starting from scratch again.

5. Each year when you receive your new insurance quote, shop around for cheaper quotes and then go back to your insurer and ask them to match the cheapest one. They will.

Part 2

Home insurance
You may face many risks if you own or are renting a home. Your home could be damaged or destroyed by fire or flooding, you could be burgled or people could get hurt on your property.
Taking out home insurance can cover you for some of these risks.

Cover sought for a 3 bed semi-detached house in Ardara, Co Donegal. The area is not prone to flooding or subsidence. There are no previous claims, no burglar alarm or neighbourhood watch scheme. There are security locks on doors and windows and smoke alarms are fitted.

Cost comparison
Quotations Excess
€239 €125
AXA €271 €125
Hibernian Aviva €349 €125
Quinn Direct €197 €125
Zurich €255 €125

There is a difference there between the dearest to the cheapest of €152 so it definitely pays to shop around.

You do not have to take out home insurance. But if you have a mortgage, your lender can insist that you have buildings insurance so that you can afford to rebuild your home if it is destroyed.

Types of home insurance
Home insurance is usually sold as a single policy that includes:
. Building insurance - covers you for damage to buildings i.e. things you can't take away with you such as the roof and walls, tiled or hardwood floors, baths and fitted kitchens.
. Contents insurance - covers you for loss of or damage to the contents of your home. This is all the moveable stuff such as electricals, clothes and even food. You can get this as separate insurance to building cover if you want and this may be all you need if you live in an apartment for example where this is general building cover.
. All-risks cover - covers you for loss or damage to valuables even when outside your home and the premium for this will be higher. You can detail items or just choose an overall value for 'unspecified items'.
. Liability insurance - covers you for injury to other people in or around your home. Most insurance policies cover this to an extent. This would be useful if a tradesman or child minder has an accident or gets ill in your home. It may also cover accidental damage to their belongings. Remember that damage to you or your property by someone working in your home is not normally covered by this insurance and you'll only be able to make a claim if the person working in your home has public liability insurance.

Tina's Top Tips

1. Do not under or over insure your home. Insure your home for the amount it would cost to rebuild, not the market value. Don't insure for too little or you mightn't be covered or too much or your premium will be high but you won't get any more than the actual loss. You can get current rebuilding costs from the Society of Chartered Surveyors.

2. For the contents make sure to include the replacement cost of everything from cutlery to a computer from the contents of your garage shed to the carpets and curtains. You can also specify certain valuable items separately such as jewellery or antiques.

3. Remember the premium you pay will depend on three things: the amount you insure your home and its contents for; the location of your home; the type of cover and discounts available.

4. Ask for discounts if for example, occupants are non-smokers, someone is there during the day, you have no previous claims, the house has an alarm and smoke detectors installed; you're in a neighbourhood watch area; you have other policies with the same insurer etc.