Cars, homes and meteorite showers: not sure what to insure?

Insurance - what is it, do we really need it and how much is it going to cost me? These are the questions that often get asked by consumers as they get bombarded with information from the hundreds of companies trying to sell insurance for almost everything and anything. In an age of accountability, you can insure your wedding day against rain. You can insure your pet iguana against illness. You can even insure yourself against being struck by a meteorite. But you have to wonder - do we really need such diverse types of insurance and is it worth forking out money every year or month for something that we are unlikely to ever have to make a claim for? Well, part of the answer lies in the law. There are certain things for which we are legally obliged to buy insurance. This is normally the case when there is reasonable risk of our actions inflicting harm or damage on a third party. The best example of this is car insurance. The very minimum legal required coverage is third party insurance - which will cover the costs of repair or replacement to other people s vehicles and property, the legal fees incurred as a result of an accident and legal liability for death or injury to any other person, including passengers. For other things in life, such as home insurance, cover is highly recommended rather than a legal requirement, but the vast majority of people play it safe and take out a policy. As a property is likely to be the most expensive purchase you ll make in your lifetime, it would be inadvisable to avoid purchasing some sort of financial protection. After all, a house is vulnerable to many problems: flooding, burglary, fire and more general ailments. These are problems which can be very costly and most people will have to pay for some sort of repair at least once during their life as a homeowner, which can amount to thousands of pounds. Paying out a small amount each month for the piece of mind of knowing that if and when any bad luck should befall your property, you ll be financially safe, certainly makes sense in this situation. In conclusion, if you drive you re definitely going to need car insurance, and homeowners are strongly advised to purchase some form of home cover, but as for insuring yourself against being struck by a shower of meteorites - well, your money could probably be spent better elsewhere!



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