Insurance is a financial product sold by insurance companies to protect you against a specified loss such as damage, illness, or death. 

An insurance policy is the contract that you take out with an insurer to protect you against specific risks under agreed terms. A policy is generally renewed on a yearly basis. Consumers are advised not to go ahead with the first quote they receive. It is important to shop around and get the best price for your needs. 

You can buy insurance policies for many aspects of your life, for example for your health, home, car, business, or retirement. However, some insurance items you are required to take out i.e. if you drive motor Insurance or home insurance as a requirement of your mortgage. Other insurance is up to the individual and are sensible items such as Life Insurance, travel insurance or saving for a pension.  

While it is a good idea to make sure you are not paying for insurance that you don’t need, you should always think about what would happen if accident happened and you didn’t have cover to protect you.

Why do we need Insurance?

Purchasing insurance can be overwhelming. Definitions, conditions, coverages, exclusions, and endorsements can definitely cause confusion and possibly give you a headache. And purchasing insurance isn’t exactly exciting or fun. But imagine your life without it. Imagine losing everything you own to a fire and not having insurance to help get your life back on track.

Insurance is a way of protecting yourself, your loved ones and your personal possessions by transferring the risk to the insurer for a premium. A premium is the amount of money you pay to an insurance company to have an insurance policy to cover you for all or part of these costs. Insurance companies assess the risk on a particular policy and then calculate the premium to be charged. You can pay a premium monthly or annually. Insurance policies are renewed on an annual basis and it is important that each year you shop around to ensure you are still getting the best policy for you individual needs and circumstances. 

If you make a claim your insurer will pay out for the loss that is covered under the policy. Some may have indicated an excess when signing the contract, i.e. €50 and the Insurance company will pay the rest. Please note – if you do have a claim this may affect your premium quote for the following year. 

Important to note: If you do not need to make a claim, you will not get your money back. 

Questions to ask yourself 

When you take out an insurance policy, you need to do some thinking about what is important to you, and how much you are willing to put aside to protect those things if you were faced with their loss.

Most people are willing to pay an insurance premium to protect things such as their home and its contents, their car, boat or caravan. Business owners will usually also take out insurance cover to protect assets and stock, and to provide financial help if they face legal issues.

Choosing an insurance policy is a matter of identifying what’s important to you. Some of the questions to ask yourself when deciding to take out an insurance policy are:

• Do I need this cover and why? 

• What you want to include in your cover

• How much you can afford 

• How long you might need cover for

• Whether you want cover for yourself and/ or for family members

Standard policy conditions 

Although policies have different terms and conditions, in general there are two main principles that are common across all insurance policies. These include:

• cover is provided for the actual value of the property or item that has been lost or damaged (its replacement value), but does not include any sentimental value

• losses must not be deliberate