Choosing the right insurance

When receiving a renewal notice for an insurance policy most people just sign on the dotted line without questioning if this is the best solution to their needs. When renewing your next insurance policy, follow this simple checklist to help you get the best deal and the correct level of cover.

1. Shop around. Many companies offer tailored policies which will allow you to customise the level of insurance you need.

2. Check the company is licensed. No insurer, broker or agent should sell insurance unless they hold an Australian Financial Services licence. If in doubt ask for a licence number and check with the Australian Securities & Investment Commission (ASIC).

3. Have you been given the right information? – before you sign any contract for insurance you should have received, read and understood the following:
· Product Disclosure Statement (PDS)
· Financial Services Guide (FSG)
· Statement of Advice (SoA)

4. Ask for an explanation – request the policy be explained to you in easy-to-understand terms.

5. What’s covered – ask for confirmation that what you believe to be covered actually is.

6. Are you getting the best price? Premiums vary greatly and some companies offer monthly repayments at no extra cost, while others may charge for this facility, making the policy more expensive in the long term.

For more information on choosing insurance, visit MoneySmart’s Insurance page.