People could be wasting thousand of pounds on useless and expensive insurances, says the new Which? Money Saving Handbook.
Although some insurances are must-haves, such as buildings insurance, contents insurance, life insurance, and car insurance, others are often completely unnecessary, have high obstacles to climb and pay out in comparably few cases, warns the Which? Essential Guide.
Despite claims of “peace of mind”, the majority of what is covered by these insurances is often already protected by legislation or existing insurance policies. For example, proven ID fraud losses will be met by people’s banks*, accidental death and injury may well be covered under standard life insurance, and mobile phones can often be covered under existing contents insurance.
Which? Money Saving Handbook identifies and explains the top five Insurances to avoid: extended warranties; identity theft cover; payment protection insurance (PPI); mobile phone cover and accidental death and injury cover.
Tony Levene, author of Money Saving Handbook, says:
“You can buy insurance to cover yourself against almost any conceivable risk - even alien abduction!
“The insurance industry’s favourite phrase is “peace of mind”, but it uses this to justify policies that cost a lot and are almost impossible to claim against.
“Instead of just blindly following what the salesman says, people should carry out a risk assessment of their own and make an informed choice about whether they actually need the insurance, and whether it’s worth the premium.”
Unless your bank can show the victim of ID fraud was complicit in some way in the fraud, or the fraud was a result of carelessness on the customer’s side, the bank will meet your losses and put matters right.
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