Is cancelling your insurance a good way to save money?

Many of us are looking for ways to save money, especially as we are all starting to feel the pinch but should you be looking to cancel insurance to save money?

Insurance to some of us can feel like a bit of a waste of money, after all, I hope for the majority of us, you will never need to claim that money back at any point. However, for the sake of a few hundred pounds a year, is it really a risk you are prepared to take?

Personally, we have insurance for a number of things and none of them is one that I would be willing to sacrifice just to save a little bit of money.

For example, our home building and contents insurance are there should the worse happen such as a burglary or even worse damage from fire for example. I know that we could not afford to replace the home we have built and those insurances give us the peace of mind to ensure that we are covered. For home insurance, I would always recommend making sure you have building contents that cover the cost of your home. With the contents insurance though, be realistic with the valuation. Over insuring your content is going to push your premium up when it won’t be needed. Take a little time to value the contents in your home to make sure that the cover is sufficient but not over-compensated for your belongings.

Is cancelling your insurance a good way to save money?

It is not just home insurance that is important though, how would you cope if you or your partner got poorly and were unable to work? I know for some people, life and critical illness do not even factor in their budget but I would really recommend you take a look, especially in the period of rising costs. With so much to pay out these days, it is less common for households to have one source of income. If one of you were to fall poorly or even worse, pass away, how do you think the other would cope? We have been in a position where we had just one income for a while due to poor health and it was far from ideal. It was this that made me realise how essential this insurance was for us as a family.

If finances are really tough, rather than cancelling your insurance completely, why not look to reduce your premiums a little? If the option is not there to shop around currently due to your premium, you could always look to reduce the premium you are on. This could include things such as removing a courtesy car from your car insurance or reducing the payout based on your home insurance contents etc. I appreciate neither of these is ideal really, however, they are a better option than cancelling the policy altogether and will give you a little support still should you need it.

Don’t forget though, car insurance is a legal requirement, without it, you will be in huge trouble!

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