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Insurance lessons we learned from the Pandemic

I think we should always look to learn something from every new situation. Over the recent Covid lockdowns, we have certainly had plenty of opportunities to experience new situations. If it has taught us nothing else, we were reminded that things can suddenly change. I am the first to admit that back in January 2020 I was looking forward to a stable year of helping clients and generally getting on with life as normal. How wrong was I? I suspect everyone else expected 2020 to be normal and we were all in for a nasty surprise.

Suddenly we were made acutely aware that the stable and healthy life, with a secure income, that we all enjoyed, needed a little more protection. It is a valuable reminder that we all need to plan for the unexpected and ensure that we can carry on, should the worst happen. Covid is hopefully a one-time disruption, but it did serve to remind us that we need to insure ourselves against the upsets that life can throw at us and protect our homes and lifestyles. When you are considering a new mortgage, buy to let, or other long-term financial commitment you need to be prepared, just in case things don’t go to plan.

Just as a reminder then, here are just some of the insurance areas everyone needs to think about. With the right cover in place, should anything happen, you will be safe in the knowledge that your loved ones are financially secure, and you can keep paying your mortgage and other key bills.

Income Protection.

Fortunately, when we get ill it is usually short-lived. A couple of days off work perhaps for a bad cold or a week for a nasty bug, at the most. That isn’t always the case though. According to the Association of British Insurers (ABI) in 2017 around a million workers fell ill with serious illnesses. Statutory Sick Pay (SSP) is often not enough to come even close to maintaining your lifestyle. Income protection will kick in, usually after a waiting period, to ease the hit from the loss of a regular wage. If you already have Income Protection Insurance, it’s worth reassessing regularly to ensure it is still going to cut the mustard if you need it.

Landlord Insurance

People often ask if they need Landlord insurance to let their property. The answer is twofold. Legally, no, there is no legal requirement to have landlord insurance. Should you have it though? For a thousand other reasons, yes! Very much so. Your buy to let mortgage offer may also demand it. Also, regular home insurance is very unlikely to cover you even if you renting your property to a family member. Would you leave your own house without property insurance? Landlord insurance is very much the same situation. We cannot stress enough about the peace of mind landlord insurance brings.

Life insurance and critical illness insurance.

These often go hand in hand and many life insurance policies include critical illness cover. Much like income protection you should review these regularly, not only to check the price you are paying but also that there is enough to make a reasonable contribution, should you suffer from a critical illness. A common mistake is to not cover yourself for enough, so it’s important to think about the value of your property and the needs of your family in a realistic way.

Don’t forget your furry friends.

It may not seem as important as the others, but you could find yourself making a very difficult emotional and financial decision if your beloved dog suddenly needs long-term treatment. Something as relatively simple for a human, like a minor operation or a broken leg, can be a big financial hit if it is for a dog or cat. There is no NHS for pets and you could be looking at thousands in vet bills, for even the most minor surgery for your pets.

When you take out a mortgage or commit to a new property as either a home or investment, you need to be realistic about your cover and your continued wellbeing, in case things take a turn for the worse. Hopefully, the pandemic will pass, and things will return to normal, but the reality of the unexpected remains. 

Call us if you have questions about the right way to approach your mortgage. We are happy to discuss your needs, so you know where you stand.

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