Think before you buy insurance bolt-ons’, cheap policies to increase profits

In Superman III, the character Richard Pryor Gus Gorman opens the way to get rich: he takes all of half cents, paid to the employees in the company where he works in the score in their favor. Simple tactic is based on the belief that the amounts are so small, the person won’t see them.

Martin James with the user to help the website Solver uses a strategy from the 1983 film as a comparison to developing area in the field of insurance – “bolt-on” or “Supplement” policies, which cost little, can provide the minimum cover, but not very profitable for the companies involved. The last few years there has been an increase in those that cover lost car keys, cancelled concerts, no shipping, Internet shopping and a case for fraud, among many others.

“All industries are developing, and the insurance industry is also developing. One of the ways their maximum profit due to the introduction of smaller policies, lower cost. They can be £3, there may be a dozen, but they are regularly added to the things – when you buy tickets, when you buy individual items online, and purchase vehicles,” says James.

“The theory is that they are low cost and You don’t think too much about saying “Yes”, so grab is much higher. But they are often very poorly written and does not provide many decent guarantees and peace of mind when you look at the fine print.”

Theft concert covers for identity

The range covered by the bolt-ons wide. There is insurance in case a concert is cancelled, and the delivery of the ordered goods arrive, Alloy wheels are damaged, or for each individual gadget in the house.

Often they can be sold at the last minute – on car insurance the seller offers insurance as tyre policy is decided, or a box appearing in the final stage of the process to buy a ticket to the concert, offering cover if the event is canceled.

As a rule, the cost will be low, so the consumer thinks, “what harm?” But with thousands of people signing up for a small amount, the vast majority of which will not be needed in income for the industry is significant.

Knowing your cover

The first thing to consider is whether you already insurance offer. The cancelled concert is usually covered by the law On consumer rights. The maintenance agreement or warranty with the products, can provide cover for accidents or breakage.

Map-insurance losses are not needed because the banks will fight any attempt of fraud and replacement as self-evident.

“Before buying insurance, add-ons, customers should carefully consider if they really need to learn about politics, and if he repeats the cover they already have. A good example is the insurance of gadget that may be redundant if personal property applies to an insurance policy,” explains Harry rose what?

The office of financial regulation and supervision (FCA) in the study on the Supplement that consumers often ended products were of poor quality and not what they need.

Step back and think

When buying a gadget like the iPad, insurance will almost certainly be more expensive than if the consumer were to surf the Internet and then make one policy for all their devices. “You don’t need to buy insurance when selling under any circumstances, so just because it is, and just because there is a field for show and you feel that you would be foolish not to, not to do it there and then.

“Subsequently, think about it and see if you are covered by existing insurance policies: and if not, then consider getting a policy on the open market that may cover a number of things,” adds James.

Cover exists in the case of identity fraud and has been dubbed “the paranoid insurance”, because the problem occurs not often. The website Moneysavingexpert Martin Lewis claims that the cover is not necessary, they say you’re paid by the banks, if You are guilty.

But why bolt-ons are?

Some insurance companies will sell policies in case of loss of the key, the others will cover dents and burst tyres. But why such problems are just not covered in a regular policy? “They have separated everything that is not essential and billing you as part of this policy. There is no reason for that,” says James.

The insurance industry claims the different types of insurance is a choice, not income. “Insurance add-ons can offer its customers broader protection to meet their individual needs. People should always take into account the value of any additional coverage offered, so they can make an informed decision about whether or not to buy”, – said the representative of the Association of British insurers (ABI).

If you buy, make sure you are covered

If you buy a bolt-on, make sure it is what you need. Some contracts may have a long list of exceptions or events is not included.

James in recent years has been policy for packet delivery based 50 different kinds of products – including the one that was sent.

Because the policy is relatively low cost, many people don’t question them and the number of complaints are low because the amount of money involved in the lawsuit is small.

It can also lead to the same cover is bought repeatedly, such as when someone upgrades their phone and buys a new policy with everyone – a number of strategies, all paid for At the same time.

What you should check …

• Never buy insurance at the point of sale just because it is offered.
• Check your existing policy to see whether you are already covered.
• If you’re thinking about buying, make sure you really are covered for what you need. Many politicians have a long list of exceptions.
• To check whether you are already covered by the warranty or the law On consumer rights.
• Purchase gadget insurance for one device is probably much more expensive than buying it for all gadgets.

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