Here are the most common insurance mistakes and how to avoid them

In association with Compare The Market

When it comes to buying insurance, it can be tempting to skip ahead and simply go with what appears to be the best deal without doing the research, but this could see you waste unnecessary money.

The trick is to know what to look for and the pitfalls to avoid.

To help you along, we have put together a guide of the most common insurance mistakes, from not comparing policies to the habits like auto-renewal and whether you really should stay with the same provider year after year.

Hopefully, this will not only help you navigate the complicated landscape but also save you some money in the process.

What are the most common insurance buying mistakes?

Imagine meeting up with a friend, ready to tell them about the amazing holiday you just booked, only to be told that you could have saved hundreds of pounds if, like them, you’d used a discount coupon that they found online. Infuriating, right?

The same applies to insurance buying – here’s what you should do.

Always compare insurance deals

To avoid this type of scenario, we recommend using comparison sites, not only to check current pricing among providers but also to take advantage of useful – and free – tools, like Compare the Market’s neighbourhood bills calculator, for instance.

Insert your postcode and other minor details into the system and it will tell you estimated average prices for things like home contents insurance and broadband for households in the same area, allowing you to see if you’re paying too much in bills every month.

Should you be loyal to insurance providers?

For long-term insurance, including for cars, houses, health etc., always look around to see what’s on offer every few years. Even if you aren’t determined about changing policies, it’s worth knowing what’s out there.

If you’re considering swapping services, try to barter a better deal with your existing provider, who will undoubtedly want to keep you and may well offer extra perks like cashback, vouchers and more.

Should you opt in for insurance auto-renewal?

Many policies will auto-renew after 12 months or whichever time frame was agreed when you first bought yours.

The pro to this is that you’ll continue to be protected and its zero effort but beware, because the insurer can hike up the price (sometimes for no apparent reason) and you could end up paying more than you need to. By law they have to tell you about the change in cost but they can also change what the policy includes, which could impact any claim you make in the future.

While it might feel like a hassle to swap insurance every year, new customers often get discounts and it’s worth setting aside a little time to using dedicated tools to research your options.

Don’t choose an insurance provider based on price alone

Money is important, but it’s not the only factor to consider when buying insurance. Always read the fine print and check if the policy covers everything you need. If you need optional extras, like dental and eye care as part of your health insurance perhaps, some providers may offer this as part of a package, while others don’t.

Check customer reviews too, and whether people mention difficulties in making a claim with the provider or other issues that could impact your relationship with them.

Don’t over or under insure yourself

Insurance is a tricky beast because it can be tempting to go all out but this could also be a very expensive endeavour. On the flipside, being frugal and going with cheaper cover could cost you dearly down the line.

Think about what kind of insurance you’re getting. If you’re after health insurance but can take advantage of free healthcare, an extensive policy could be needless but if you have a history of illness, having extra protection could offer comfort.

If you’re after travel insurance, where you’re travelling to and what you’ll be doing on the trip matters because you might need add-ons for things such as extreme or winter sports.

Whatever your insurance needs, it’s always useful to refer to comparison sites, talk to an insurance agent or financial expert, and ask family and friends for advice (some companies offer referral fees too).