Insurance - How Much Is Too Much?
By Andrew Regan

It seems that insurance can be bought for just about every conceivable device or potential eventuality. In the news, celebrities insure those body parts for which they are famous, while the latest games consoles, PCs and even watches are subject to extended warranty deals, designed to have the buyer part with even more of their hard-earned cash.

Celebrities insuring their bodies - or the sum of their parts - are nothing new. In fact, celebrity insurance can be traced back to the 1920s when cross-eyed silent movie star Ben Turpin insured his eyes for $20, 000 against them uncrossing. Other famous celebrity insurance policies include Marlene Dietrich's $1 million insurance of her voice, Dolly Parton's $600, 000 breast insurance and Ken Dodd's $4 million cover for his teeth! Bette Davis even insured herself against weight gain to the tune of $28, 000; but all this pales in comparison to 'Lord of the Dance' star Michael Flatley's £25 million insurance of his legs!

However, for the vast majority of people, there is little need for such extravagant insurance cover, but even so there are still many types of insurance cover available, making it difficult to know what is necessary and what is not.

When trying to work out which insurance policies you need, it's probably a good idea to start with those that are required by law. For the general public, only motor insurance is a legal requirement for drivers in the UK; so if you have plans to take to the open road, or indeed are already on it, then motor insurance isn't just a choice but a necessity. You can expect to face heavy fines, and even imprisonment if you are caught driving without car insurance. Furthermore, car insurance is required when it comes to taxing your vehicle.

While home insurance isn't a legal requirement, many mortgage lenders will insist that you have buildings insurance before they will consider any home loan. But, just because it isn't a legal requirement doesn't mean it's unnecessary. Home insurance is available as two separate products - buildings insurance and contents insurance and each can be bought separately, although most insurers now offer discounts when both are bought together. As the name implies, buildings insurance protects the structural elements of your home, while contents insurance protects your possessions.

If you travel regularly, then perhaps travel insurance may be a consideration. Again, while not a legal requirement, it can cover any expense incurred while you are travelling, especially outside the UK where you would be expected to pay for any treatment you receive in the event of an accident. Furthermore, travel insurance can help alleviate the loss of your luggage, flight delays or should you lose your currency or credit cards. There are many travel insurance packages available, from family cover on a single trip to annual policies covering unlimited journeys, while specialist policies are also available for things not covered within normal agreements, such as ski equipment.

How would your family cope should you ever be involved in an accident that stops you from working, or even worse, kills you? A life insurance policy can provide for those eventualities by paying out a lump sum, which can help stave off any financial hardship. Life insurance is often linked to a mortgage as this is normally the main expense that a family will have to deal with, and although singletons and couples without children might not need life insurance, it should be considered by families with children.

If you have pets, then pet insurance might be an idea. Given the fact that veterinary treatment can cost more than £1000 to mend a dog's broken leg, pet insurance can help alleviate the financial burden associated with treating sick or injured family pets.

However, while there are undoubtedly insurance policies that merit consideration, there are also those which many people can certainly live without! For example, while many people gripe and grumble about NHS waiting lists, the fact of the matter is that the NHS is paid for by public taxes and treatment is free. In light of the huge waiting lists for treatment, there is now a market for private medical insurance which can be used to circumvent the NHS queues and obtain treatment quicker; but private medical insurance can be costly, and not every ailment is covered.

Even consumer goods haven't escaped the insurance add-on, and now everything from watches to mobile phones can be insured against loss or damage. However, in many cases the insurance can cost you almost as much again as the cost to buy the item in the first place! Furthermore, the vast majority of items are likely to be covered by a good home insurance policy anyway. There might be some caveats, however, such as tradesman's tools or musical instruments which might benefit from a specialised policy, so be sure to check with your insurer.

But while insurance is undoubtedly beneficial in many situations, it is less so in others. Despite what the salesman tells you, you don't need insurance for everything - the trick is to know what you need and what you don't!

Andrew Regan is an online, freelance author from Scotland. He is a keen rugby player and enjoys travelling.

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