Everything You Need To Know About Insurance

Written by Money Empire

December 20, 2022

Insurance is a murky place. It has a bad rap. People don’t get covered properly, so when the proverbial hits the fan, they aren’t covered. To make things worse, insurance is one of those pesky things that come out of your pay to really provide you peace of mind, and ensure you never have to use it. 

It’s tough to be covered correctly without a financial adviser or an insurance broker going over your details with a fine toothed comb, and it’s even harder to see the value in insurance when you’re just scraping by. Insurance is there to protect the foundation of your wealth – including your car, your phone, and yourself.

How do I choose the right insurance?

Let’s split this up into a couple of segments for your personal insurance. First, you have your assets and things, such as your home, your car, and contents. 

  • Find out what you own of value, and if you would need financial assistance to replace them if they were ever to be stolen, damaged, or lost.
    • For example, if you have a $20,000 car, how would you go about replacing this should something happen to it? Or, if you have a laptop that you use every day, even just for some online shopping. 
  • Then ask yourself if the location where you live, or type of work you do, lower or raise the risk of damages, theft, or the item being lost?
    • Do you travel by car regularly? Do you often take your laptop to a cafe and work remotely? 
  • Finally, see what the monetary value is of the item.
    • If you have a brand new laptop, are you covered for the entire cost of replacing it? Do you have an older laptop that has it degraded in condition and natural wear and tear?

Secondly, you have yourself. This means your health, your income, and even your life. We reckon your life is invaluable! You can’t earn without having good health, and everything you have worked towards can collapse if your income goes. ACC doesn’t cover everything, and relying on that to pay a mortgage and all of the other expenses might not be enough!

As always, we say go to an insurance broker or a financial adviser.

What is the role of an insurance adviser?

In general, a financial adviser or insurance broker will know the ins and outs of the industry, and make sure you’re covered for everything you need. They will help you identify any risks and use insurance to mitigate them. An insurance broker will act as a middle-man and a go-between between you and an insurance company, and will fight for you to get the best cover at the best price. You’ll be covered from dishonest or ‘sharky’ conduct. 

They will do a lot of the heavy lifting for you and aren’t limited to whatever provider you think might be right for you based on ads or your own research. Your broker will also keep you up to date with your insurance premiums, and because they work in the industry day to day, if there are to be any changes, they will front foot it. 

To top it off, life changes. Sometimes it’s for the best, sometimes it’s for the worst. Your broker will update all of your policies with you.

What is the most important insurance to buy?

Did you immediately think of your house? Your car? Even your phone?!

The most important insurance to buy is to cover yourself or your loved ones. Using health insurance, income insurance, trauma insurance, or life insurance might seem like a big decision to make, especially with how much may go out in premiums (what you pay for each month). There is nothing worse than being faced with a horrific decision and not having the money to help or support your family.

How long does an insurance company have to settle a claim?

It ultimately will depend on what insurance you are claiming and who the provider is. Sometimes, you will even have exactly how long it takes from the claim to be accepted to the date of payment written into your policy. 

According to Consumer Protection, insurers have their own Code of Conduct they need to abide by, consistenting of standard consumer law (such as the Consumer Guarantees Act or the Fair Trading Act). The Code of Conduct also has to be compliant with expectations of what it means to be a responsible insurer. 

Money Empire’s thoughts on insurance

Insurance covers you for sudden and unexpected events. If your old car breaks down, you may struggle to get a claim through. If your old car is in an accident or has a faulty handbrake, it could be more likely you get a claim. It totally depends on your insurer and what policy you are specifically covered for.

We get that when times get tough, and the budgeting gets a little tight, the first thing you want to do is to get rid of insurance completely. Surely you will take really good care of your things, eat healthy, lock up the house, and drive super safely, right? Unfortunately, that’s not how life always works – which is why you are covered for sudden and unexpected events. 

Insurance is the final piece of the wealth building puzzle.

Our new insurance adviser Lucy is your go to for all things related to insurance. Get in touch with her through our contact form or email us directly. 

All information in this article is designed to be taken as general advice, not as tailored advice. For any specific advice, please get in touch with one of our expert financial advisers.

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