Making cents of insurance
"Do you know how much you're spending on insurance?"
This was a question we put to many Kiwis. They, like us, did not.
Take a minute. Add up all your insurance premiums (tip: try using Quashed). You will likely be surprised by the total sum you're spending across all your policies.
Having spoken to a number of people in the industry in recent months, a common suggestion appeared.
"The less customers know about how much they are spending on their insurance the better."
This sounds terrible, and it is. But unfortunately, it is telling of the state of, and business of, insurance locally.
Insurance is meant to protect you and me financially when something bad happens but somewhere along the lines, it became a dirty word. Diluted and polluted by bad players that created a negative perception that is reinforced from time to time by the media.
Insurance is expensive; maybe not?
For most, if not all, of us, when it comes to insurance we drag our feet and feel as though we are getting ripped off. This can be a dangerous mindset if we end up skimping on or skipping it altogether in a bid to save some money. It could end up costing us more if and when something bad happens and we are not protected. A whole lot more.
On its own, the total premiums spent on insurance may seem like a huge cost running into the thousands of dollars for the average household. However, when put in context of our total income and other expenses, this becomes a cost that is comparatively small. Have a read of "Are we spending too much money on insurance?" and hopefully it will help provide you with a different perspective.
The average household spends about 4% of household income on insurance. If the 4% spent on insurance policies are protecting all that you and I care about including the 95% that is not being spend on insurance (home, car, family, lifestyle, etc.), is that still too much an amount?
Put your insurance into context.
Take these three quick steps to figure out how much you're spending on insurance and what you are covered for:
Find all your insurance policies
Add up all your insurance premiums
Consider if any of these insurance are insufficient or are surplus to your needs
To make this simpler, try out Quashed. It is designed to help you bring together all your insurance in one place and to know exactly how much you are spending.
Now knowing how much you're spending on insurance, put it in context of your total income and the value of the things you are protecting. Hopefully this helps with a different perspective, one that reminds us all of the purpose and importance of insurance; not just the price.