The DO’s and DON’Ts of shopping around for insurance

Tips for getting the right insurance deals and making sure you’re not paying too much for your policy, whichever type of insurance you’re buying.

Do you know the details of all of your insurance policies? Whether it’s home, car or health – it’s important to stay on top of what you’re paying for.

And with health insurance premiums set to rise on April 1, there’s no better time to acquaint yourself with what you really need to be paying for, and checking that your policy matches that.

TODAY chatted to Money Expert Bessie Hassan from Finder.com.au to get her take on the DOs and DON’Ts of buying insurance.

TODAY: Firstly, how do you check what you’re covered for? Can you please answer generally for the different types of insurances.

HASSAN: Pull out your product disclosure statement (PDS) from when you signed up for the insurance and take a close look at inclusions and exclusions. If you can’t locate your PDS, or it’s not clear, simply give your insurer a call and request a new one. Or go one better and have them talk through the details with you so you become more confident in understanding your policy. Ask questions — for example, if you need clarification on waiting periods or annual limits, simply ask instead of missing out.

TODAY: What should we do to make sure we’re getting the best possible insurance? Can you please answer generally for the different types of insurances.

HASSAN:  Do check whether you already have cover: Be aware of limitations. For example, your super fund may include life insurance or income protection, but this cover could be limited or capped. For example, you may be covered for $200,000, but considering the average mortgage size in Australia is almost $400,000, this may not be enough for your personal situation. You you may want to take out a separate policy or upgrade your cover. On the other hand if you’re retired and you’ve paid off your house, this may be more than sufficient. The key is to check. It’s a similar story with complimentary travel insurance on credit cards – basic cover is better than nothing, but upgrading your cover could prevent disappointment down the track. The key is knowing what is included — and then making an informed decision.

Do revisit your private health plan before the price increase on 1 April each year: Health insurance premiums have risen by more than 50% over the last seven years. If you want to ensure you’re getting the best value cover, jump online and compare policies, prices and your options. You can save money by paying your annual premium upfront before 1 April, which will lock in 2017 prices. You also usually get an additional discount if you’re prepared to pay 6 or 12 months in advance.

Do see if you’re eligible for a multiple policy discount: For example, you might have car insurance with one provider and be eligible for a discount off your home insurance.

Do use your loyalty as leverage: Australians stay with their health insurance provider for 12 years, on average. If you plan on sticking with your health fund, demand a discount or an inducement, such as waived waiting periods, vouchers or gift cards, or increased limits.

TODAY: If we want to avoid paying more, what DON’T we do? Can you please answer generally for the different types of insurances.

HASSAN:  Don’t take out insurance based on prices alone: You don’t want to be in hospital and find out you’re not covered for certain medical treatments. Often for a few more dollars you can get significantly more cover – so it’s worth shopping around and weighing up the best option for your circumstance.

Don’t leave it too late: to take out insurance or upgrade your insurance (if your pet is too old, if your flights are cancelled). Don’t wait for something to go wrong or until it gets too late. Treat insurance as an essential and not as an afterthought.

Don’t be afraid to switch: Don’t let your loyalty or laziness cost you! You could save yourself hundreds, or thousands, per year if you’re prepared to shop around. The key is getting on the front foot and doing your research! The good news is that 45% of Aussies are planning to switch at least one provider this year — why don’t you join them?

TODAY: So for those looking to change their insurance, when it the cut off before the health price hike in April.

HASSAN: As well as saving money by paying your annual premium upfront before 1 April, which will lock in 2017 prices, it’s worth checking if your workplace is affiliated with a health fund. Also see if you are eligible to join an industry health fund — these are not-for-profit and tend to be good value for money.

* In highlighting particular offers we are not making specific recommendations as this article does not cover all available products and may not compare all features relevant to you. Any advice provided is general in nature and does not take account of your needs, objectives or financial situation. Individuals should consider their own circumstances, and if in doubt seek appropriate advice, before proceeding.