As a result, Amanda claimed back a
staggering ?100,000, which paid not only the tax bill but her mortgage as well.
Many of us haven't got a clue about the exact sum we're paying on insurance each
year or the details of what we are in fact covered for. Not only are we shocked
to find out that we are actually covered for more than we in fact realise, but
that we're doubling up by paying for various types of insurance that actually
cover the same thing.
You'll find that it's areas such as loss of income,
legal expenses, theft and death which most often people wind up paying out twice
for when there is no need - mainly because they haven't carefully read the
insurance policy or because it has been the case that some insurance has been
put on to some policies as an added bonus. In a recently released Financial
Services Authority survey, it shows that car insurance policies also come with
added extras like breakdown recovery and legal expense cover. Paying out for
these added extras when you do not want them is an easy mistake to make,
according to the survey, because you actually have to physically ring the
insurance firm and tell the staff that you do not want them before these
'options' are removed from your agreement.
Take permanent medical insurance (PMI) for example. Many aspects of this
policy cover you for the same things that Payment Protection Insurance covers
you for. But few people realise this and so they take out both.
Ombudsman is very aware about the situation surrounding insurance duplication.
They say that "people often do not realise until they make a claim that they
have been paying for a policy that provides very little, if any, benefit".
Take a look at your Critical Illness Insurance, as this is one area in which you
sometimes get cover from your employer. Find out whether you have this type of
insurance with your work before you make the purchase on this policy. Do the
same with life insurance, because if you have a company pension scheme, life
insurance is something you do not actually need.
The reason? Because most
company pension schemes have a death-in-service benefit. What this means that
should you die while you are still an employee at that particular firm, then
large, a tax free payment will be made - a payment which could add up to four
times your annual salary at the time of your death, or more. Other types of
insurance you might not need includes mobile phone insurance. The consumer
watchdogs will tell you this is something that's often a waste of money because
you have to pay the first ?50 of the claim and if you already have home
insurance, that insurance might provide you with some protection.
include car insurance extras such as legal expense cover. If you are a member of
a trade union, then you could have some legal cover anyway.
Some companies trying to get people to take out ID theft insurance. A waste
of money? The consumer watchdogs think so because if it is the case your ID gets
stolen you are only responsible for the first £50 and most of the time the banks
are prepared to waive charges.