Explain what is choosing a policy and why do we need it in insuring Against the Risks? what is the importance of choosing a policy in Insuring Against the Risks? Also, below the Choosing A Policy there are some questions to consider in deciding between policies and explain every question provided below.

 

Choosing A Policy

There are a diverse range of policies available and prices for what is essentially the same package can vary to a surprising degree, so the message is `shop around'. Some questions to consider in deciding between policies are:

 

• Have you read the policy carefully? Do you know exactly what you are covered for and what is excluded?
• What insurance do you need? Compare policies based on your requirements, not based on added extras that you don't need.
• Under what conditions, if any, would you have to pay some proportion of a claim?
• Are there limits to how much can be paid under each individual claim, or limits to what can be paid out under the policy in any single period?
• Does the insurance company have the option of replacing goods rather than paying cash?
• Does the policy provide for a "new for old" replacement, or does it only insure the present market value of the property?
• Have you insured for enough value? Note that if you insure for less that the full value of the property, then your insurer will most likely only pay a proportion of the value of the property.
• Have you provided all the necessary information? Policies invariably require you to provide a range of information to the insurer - failure to do so could leave you with no cover.
• Are any discounts available to you?