Guide to insurance

Insurance types

There are dozens of variations on insurance policies and cover, but here are the most common :-

Life insurance

Usually based upon a lump sum paid out if death occurs during the specified term of the insurance. Critical illness benefit is often package with this type of insurance.

Critical illness insurance

Designed to ease long term financial difficulties and life style changes if the policy holder suffers a permanent chronic or long term critical illness or dismemberment. Policy cover varies but may include loss of sight, hearing or movement.

Travel and
Sports / Winter Sports / Hazardous Sports insurance



Travel insurance is designed to protect you and your possessions (sometimes optional) whilst you are abroad. This often included medical expenses which can be very high in certain countries. Cancellations is also an option of this type of insurance.
Sports / Winter Sports / Hazardous Sports is usually a costly extra but can be necessary and covers high risks sports or activities whist abroad.
E111 now replaced by EHIC (card) is an essential when travelling abroad (EU) and provides financial benefits such as free or reduced cost state provided healthcare (EU) in the event of an accident.

Wedding insurance

Covers various items to do with your wedding day. May include cancellation due to illness or bereavement (immediate family), Caterers fail to turn up, Lost rings, lost or stolen presents, limited public liability among other items. The policy is usually based on a replacement or compensation basis.

Car insurance





Cover varies by type (not all options may be available). You can get Third party only, Third party fire and theft, and Comprehensive. Some, usually comprehensive, include no claims bonus protection. During the course of you motor insurance, the more years of insurance you have without a claim gives you a no claims bonus. Some companies will give you additional no claims bonuses or other deals. Usually the more no claims years you have the cheaper your insurance will become. You do not have to stick with one company / broker to keep your no claims as your bonuses are transferred to your next insurance broker. Note: Third party does not cover for damage, loss or theft of your own vehicle or possessions.

Breakdown insurance

This type of policy provides recovery and repair services for vehicle owners. Numerous companies directly or indirectly provide the services (repair and recovery) and some provide there own direct insurance e.g. RAC and AA

Home insurance





Often a buildings and contents insurance package, but check carefully.

Building insurance

Insures the main body / structure of the building. Protects against fire, flood and subsidence amongst others. This policy will pay to rebuild or repair the property. Normally required at exchange of contracts in a property purchase and usually a requirement for a mortgage.

Content insurance

Cover for household possessions, generally rule for cover is based on anything that can be moved while buildings insurance covers anything that cannot (windows etc.). Contents cover varies and can also include items not held at the property e.g. laptop or some mobile devices. Note jewellery and cash may not be covered as standard.

Indemnity insurance

Mortgage indemnity insurance. This insurances purpose is to protect a mortgage lender in case you fail to make your mortgage payments. It is often compulsory and you may not be aware that you are paying it. Some mortgage lenders don't seem to charge it, but may alter your interest rates to cover it. You may be able to avoid paying it if there is a certain threshold - check the level at which the cover is compulsory and borrow just under it.

Professional Indemnity Insurance provides financial protection for a wide range of professional advisers. In the event that a client suffers financial loss as a result of alleged neglect, error or omission Professional Indemnity Insurance will meet the cost of defending claims and any damages payable.

Commercial / Business insurance



Varies on the particulars of your business, you can get specific types for varies businesses. The type of cover is relative to your business e.g. Shop or retail insurance, restaurant insurance, commercial vehicle insurance, pub & inn insurance, manufacturing insurance.

Public liability insurance

Provides financial protection for a wide range of business types. In some cases this is required, it depends on your type of business but if you deal in some way with the public you should look into public liability insurance. In general public liability protects you from damaging other people and their property, whether you are visiting them at their home, or place of work, or they are visiting you.

Pet insurance

Cover to assist in the event of injury, vet treatments etc. for your pets.