Expats Can Shave Hundreds off Insurance Bills and Save the Difference

In these tough economic times we’re all looking for ways to save cash, and according to a leading insurance provider, one of the first ways we look to save is by cutting back on inessential items.

We may choose not to go out so often, we may cut back on our alcohol intake, not go away on holiday and put off those larger yet inessential spends such as a new TV or piece of furniture.  These savings can have a large and immediate impact and probably don’t really impact that negatively on our lives.  However, there are other common ways that people cut back by cancelling insurance cover for example, and taking such action may be unwise at best, and illegal or dangerous at worst.

In this article we’re going to look at how expats can shave hundreds off their insurance bills and save the difference for maximum gains – but without compromising their level of cover.  This results in a best of both worlds situation – something that’s usually quite hard to achieve I’m sure you’ll agree!

American Express Insurance Services have been looking into how expatriate and onshore customers are managing their money and which ones are cutting back on insurance cover in a bid to save cash.  It seems that cutting insurance cover is a very common way to save, whether you live at home or abroad.  But as mentioned, it is not always wise – or even legal – to drop insurance cover just like that. 

There are some insurances that we feel are a total rip off and we wouldn’t take them out even if you paid the premium for us (!), and yet there are others that are essential.  Even having said that however, you can still find ways to save some money on some premiums, and by doing that and by ditching the insurances you don’t need, you can save a tidy sum each month and make it work for your long-term financial health.

Which Insurances Can You Ditch?

Did you know that many expats who have pet insurance cover in place when they move abroad fail to cancel the policy when they relocate overseas?  Despite the fact that they’re unlikely to repatriate their pet when it needs vet cover!  What’s more, many people say that pet insurance is an insurance product too far!  If you have pet cover in place at home and you’re living abroad, cancel the policy.  If you’re thinking about taking out pet insurance abroad, think carefully about the age and health of your pet and whether you make fair use of your insurance anyway.  Many people have pet insurance unnecessarily, and they find that any vets visits they do make never reach the excess level, and if they do, they are for non-claimable items such as routine booster jabs.

If you do want to pay for your pet, would it be better for you to allocate the monthly premium to an interest earning offshore savings account so that the money is there for a bill if your animal falls ill, but is pure savings profit if you go all year with a healthy animal?  Of course, you may disagree, and everyone’s circumstances (and pets) are different.  But think about whether you really need this insurance in place.

The next insurance that you can probably bin is ID theft protection insurance – the companies selling these policies are making a fortune!  Did you know that, according to the wonderful experts at LoveMoney.com, this type of insurance doesn’t even cover you for any financial loss you incur as a result of having your ID stolen.  So what is the point of it?  It is just another way for insurance companies to enhance their profits! 

Going abroad you may feel that you are more at risk for ID theft, but that’s not true.  If you are careful about protecting your identity and you take all the usual careful steps such as protecting your pin and shredding all documents that contain any personal information before you bin them, you are doing what you can to protect your identity.  Something that an insurance product cannot claim to do.

And finally – mobile phone insurance – probably a great big rip off because the list of exclusions is so long and the cover is so expensive relative to the product being insured.

Which Insurances Should You Keep?

As an expat you need health and travel insurance; if you ever want to legally drive, you are legally required to have car insurance, and if you have financial obligations such as a mortgage or financial dependents such as a spouse or children, you need life insurance.

How Can You Cut Insurance Premiums?

With your travel and health insurances make sure you’re only paying for what you need.  Insurance companies whack on all sorts of additional cover, and whatever the marketing may suggest, these are not freebies!  So, take your insurance needs right back to basics, sit down and think about the type of cover you cannot live without and go and find that level of cover. 

If you’re not planning on travelling anywhere for a period of time you can put on hold getting travel insurance, and if you are in good health and hardly ever use your health insurance you can also think about increasing your excess.  If you increase the excess you often find that premiums decrease.  Look around on the Internet for which providers are offering the policy closest to your needs, and perhaps even speak to a financial adviser about finding the cheapest yet most applicable level of cover for you.

When it comes to car insurance – it sure does pay to shop around.  Yes, price comparison websites are frustrating, as is comparing the small print on similarly priced deals – but a reward for the effort you put in is the money you will save.  And finally, when it comes to life insurance it is not worth cutting and compromising the level of cover you have.  If you have a good policy in place already, think about carrying it on as the older you get the harder it is to get cover and the more expensive cover gets.  However, if you have no cover in place yet, think about the type of cover you need.  Generally speaking, family income benefit and decreasing term insurance are cheaper than level term, and speak to an adviser if you’re not sure how much or what type of cover to get.  They will ensure that you’re neither under nor over insured.

How Can Expats Put Premiums Saved to Best Use?

Most expats are in a wonderful position compared to their peers back onshore!  They can have access to the whole profitable world of offshore savings and investments, and even if you’re only in a position where your cutting back on insurance saves you a few hundred pounds a year and you want to keep the money close at hand, chances are you can get a more favourable rate of interest, or a savings/investment policy with more favourable terms, than your onshore counterparts can access.

When it comes to saving though, you need to speak to a financial adviser about how best you can ramp up your own personal finances as decisions made have to be right for you on an individual basis.