Which Insurance Schemes Do You Really Need?

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You can practically insure against anything. Athletes have been known to insure their legs and singers have been known to insure their voice. For peace of mind, some people may take out countless insurance schemes. However, this can start to become costly very fast. Is it worth paying all this money to prevent disasters that may never happen?

Weighing up the risks is important before investing in or rejecting an insurance scheme. For those in a quandary as to which schemes to take out, this guide can be of help.

Compulsory insurance schemes

Some insurance schemes are mandatory and not having them can get you in legal trouble. The major one is vehicle insurance – if you own a road vehicle, a third party insurance scheme is a must if you plan to drive that vehicle.

In business, other compulsory insurance schemes can apply. Employer liability insurance is one of these and can cover costs for staff that have been injured or taken ill due to work. Specific trades may have other compulsory schemes, for example a vehicle repair company is often obliged to take out a road risk policy. What is a road risk policy and what is the price? If you’re unsure, there are many online sources that can help you out. For starting any business, make sure you always look into the legalities surrounding your specific trade in order to prevent getting caught out.

Optional – but recommended

Some insurance schemes are optional, but taking them out is advised. For countries that don’t already have a government funded health service, having health insurance in place can save you a lot of money against any potential emergencies.

Property insurance is generally advised for all home-owners as a precaution against a burglary or a natural disaster. If the crime rate is higher in your neighbourhood or your area has been known to be prone to floods or earthquakes, property insurance rates could be higher (some companies may not insure you). In these cases, having an emergency fund is recommended.

For those travelling abroad, travel insurance can also be worthwhile. Different schemes will protect against different things – most generally include overseas medical costs, flight cancellations or lost baggage.

Moneymaking scams

The majority of other insurance schemes will depend largely on your lifestyle and the individual risks. A handyman may see fit to insure specialist tools whilst a retailer selling fragile items may see it as worthwhile to take out a product liability insurance scheme. These can all be valuable schemes – but there are others that simply aren’t valuable are largely just money making scams.

These largely include checkout warranties on electronic items or services such as boiler repair. Not only do these warranties only ever cover a short period of time such as a year, they often contain lots of hidden terms and conditions. Don’t pay for these unless you really believe you’re going to need them (e.g. taking warranty out on a phone when you work on a boat, where the chance of your phone getting wet and broken is higher).