Generally, firms selling insurance and those providing insurance cover have to be regulated by us, or be the agent of a regulated firm.
There are some exceptions, for example the sale of extended warranties on non-motor goods (such as on electrical goods) where the person selling the insurance is also providing the goods.
You can buy insurance directly from insurers over the phone, internet or by mail, and also from banks, building societies, insurance or mortgage brokers, financial advisers, or supermarkets.
Comparison websites will ask you several questions and then provide you with quotes from various brokers and insurers. None of the websites cover the entire market, and some larger insurers are not represented on any of the websites, so you may wish to contact them directly. The comparison website should contain
a list of the brokers and insurers represented on its panels.
Cooling-off period
You have the right to change your mind and have your money back within a certain period (usually 14 or 30 days) after arranging any insurance contract.
Information you’ll be given
If you decide to buy through a broker, they will give you details about the service they are offering you.
This will tell you:
- whether they’re offering you advice or just information about the product;
- whose insurance policies they offer (it may be from one company or many); and
- how much you’ll have to pay for the service.
Once you’ve discussed what you need and answered the questions you have been asked about yourself and what you want to insure, you will be given key
policy information.
Even if you decide to buy insurance direct from an insurer, you will still be given this information.
This information will set out what the policy does and does not cover, any limits or restrictions, and any other important features you need to know before you make up your mind.
Make sure you get this information, and that you read and understand it. Ask the provider or insurance company to explain anything you don’t understand. You can also use this information to shop around and compare like with like.
Disclose the full facts
‘Material’ facts are facts that you ought reasonably to know are relevant to the insurer’s decision whether to offer you insurance cover and at what price, so they must be disclosed. This information will form the basis of a contract between you and the insurer.
If you are asked a specific question, you must respond honestly, and it is no defence to say that you didn’t realise that the fact was material. If you don’t disclose material facts, your policy may be invalidated and you won’t be able to make a claim.
So make sure you disclose everything, however irrelevant it may seem at the time. Also check with your insurer if and when you need to tell them of changes in circumstances.
Don’t under-insure
The average home now contains over £40,000 in clothes, kitchen gadgets, electronics and furniture. It is up to you to insure accurately. If you underinsure
your goods – so you insure your contents for £20,000 when they are worth £40,000 – the insurer would only be obliged to pay out up to £10,000
if you made a claim under this policy (ie half of what you claim for).
Check the exclusions
The most common reason for insurers to reject a claim is because the policy didn’t cover what people thought it did. Check the policy documents to find out what is and isn’t covered.
