Insurance exists for one job: to protect you from a loss you couldn't absorb on your own. Judged by that single test, a surprising amount of what gets sold to us fails — while the cover that would genuinely save a household from disaster is the very thing people skip. Getting this right is less about buying more policies and more about buying the right ones.
The question that sorts the wheat from the chaff
Before buying any policy, ask one thing: if this went wrong and I had no insurance, could I cope financially? If the answer is "yes, it would be annoying but survivable" — a broken phone, a dead toaster — you probably don't need to insure it. Insurance is for the events that would genuinely sink you, not the ones that would merely irritate you. Premiums on small, affordable risks are almost always a poor deal, because the insurer has priced in a profit on top of the average payout.
Cover you can usually skip
- Extended warranties on appliances and electronics. The classic up-sell at the till. They're typically expensive relative to the item, overlap with your existing rights, and your consumer protections under the Consumer Rights Act already cover goods that aren't of satisfactory quality. For most everyday gadgets, self-insuring — keeping a small buffer for replacements — works out cheaper.
- Standalone mobile phone insurance. Often pricey for what it is, riddled with excesses and exclusions, and frequently duplicating cover you already hold through a packaged bank account or your home contents policy. Check what you've already got before paying again.
- Personal accident and "just in case" add-ons bolted onto other policies. Cover for very specific, low-probability events tends to be high-margin for the seller and rarely pays out.
- Payment protection on small loans sold alongside the borrowing. Treat any add-on offered in the same breath as a product with healthy scepticism.
None of these is automatically a scam — circumstances vary — but the default answer for most people is "no, keep the premium."
Cover you really shouldn't skip
Now the other side, where people under-insure the things that could actually ruin them.
Income protection. The most underrated policy in Britain. Your ability to earn is your single biggest financial asset, and if illness or injury stopped you working for months, most households would be in serious trouble within weeks. Income protection replaces a portion of your salary if you can't work. It isn't cheap, but for anyone who relies on their income — which is almost everyone — it's far more important than insuring a phone.
Life insurance, if people depend on you. If your death would leave a partner, children, or anyone else unable to pay the mortgage or keep the lights on, life cover does the one job nothing else can. Level term life insurance is often remarkably affordable when bought young and healthy. If nobody depends on your income, you may not need it at all — this is exactly the kind of policy to match to your actual circumstances.
Buildings insurance. If you own your home, this isn't optional — your mortgage lender will insist on it — and for good reason. Rebuilding after a fire or flood is the definition of a loss you couldn't self-fund.
Adequate contents and the legal bits. Enough contents cover to actually replace your belongings, and the legally required cover you can't drive or run a business without, such as motor insurance and employers' liability.
The middle ground: read before you renew
Plenty of cover sits in between — travel insurance, pet insurance, home contents. Here the answer is "it depends," and the discipline is to check what you're actually buying rather than auto-renewing. Packaged bank accounts often bundle travel and breakdown cover you've forgotten you have. Pet insurance can be genuinely worth it given how fast vet bills climb, but the cheap policies that cap payouts or drop conditions after the first year can leave you exposed at the worst moment.
The takeaway
Good insurance buying is mostly subtraction. Cancel the small-risk policies you're paying for out of habit, check what you already hold before buying anything new, and redirect that money towards the big-risk cover — income protection, life cover where it's needed, and a properly sized home policy — that actually stands between you and disaster. Fewer policies, better chosen, is almost always the cheaper and safer place to be.