Top Insurance Policies Worth Having in the UK

Top Insurance Policies
Top Insurance Policies

What are the most important insurance policies that everyone living in or visiting the UK should have?

What is the significance of these insurance policies? And where can one find the cheapest insurance quotes online?

It is worthwhile to invest in whatever it takes to protect your most valuable assets. Obtaining adequate insurance coverage is a critical component of developing a sound personal financial strategy. The right insurance coverage can go a long way toward protecting your earnings and valuables.

In this article, we’ll go over five policies that you should have if you live in the United Kingdom.

What is Insurance in the UK

Insurance is a financial product offered by insurance companies that protects you and/or your property from the risk of loss, damage, or theft (such as flooding, burglary or an accident).

Some types of insurance are required by law, such as motor insurance if you drive a vehicle; others may be required as a condition of a contract, such as buildings insurance as a requirement of your mortgage; and others are prudent to purchase, such as life insurance or pension savings.

While it is important to avoid paying for insurance that you do not require, you should always consider what would happen if disaster struck and you did not have coverage to protect you.

You can purchase insurance for many aspects of your life, such as your health, home, car, business, or retirement. An insurance policy is a contract you enter into with an insurer to protect you from specific risks under agreed-upon terms.

How Insurance in the UK works

When you purchase a policy, you make regular payments to the insurer known as premiums. If you file a claim, your insurer will compensate you for the loss covered by the policy.

If you do not file a claim, your money is not returned; instead, it is combined with the premiums of other policyholders who have purchased insurance from the same insurance company. If you file a claim, the funds are drawn from a pool of policyholders’ premiums.

You have to consider the following when deciding on the type of insurance:

  • why do you need to cover yourself with insurance
  • what you want to include on your coverage
  • how much insurance you can afford
  • how long you might need cover for
  • whether you want to cover for yourself and/or for loved ones in the insurance

You can get insurance by doing the following:

  • contact an insurer directly, either online or over the phone
  • seek professional advice through an insurance broker
  • speak to an independent financial adviser through the Association of Professional Financial Advisors 
  • check comparison websites to get the best deal on the type of policy you’re looking for

How insurance premiums are calculated in the UK

Risk data is used by insurers to calculate the likelihood of the event you are insuring against occurring. This information is used to calculate the cost of your insurance policy. The higher the risk to the insurer and, as a result, the higher the cost of your premium, the more likely the event you are insuring against will occur.

The two important factors an insurer will take into account when working out the premium they will charge are:

  1. How likely is it in general terms that someone will need to make a claim?
  2. Is the person who wants to take out a policy a bigger or smaller risk than the ‘average’ policyholder. A young person driving a powerful car, for example, maybe charged a higher premium because they are statistically more likely to be involved in an accident than a mature, experienced driver.

Top 10 must-have Insurance Policies Worth Having in the UK

Here are the top 10 insurance policies that is worth having in the UK:

  • Auto Insurance
  • Life Insurance Policies
  • Social insurance
  • Health Insurance Policies
  • Disability Insurance
  •  Homeowners’ Insurance
  • Dental insurance
  • Contents insurance
  • Unemployment insurance
  • Travel insurance

#1. Auto Insurance

Auto insurance is required in the UK if you drive. All vehicles used on the road or kept in public places must be insured, unless they have been declared ‘off the road’ if they are not being used. Automobile insurance is also big business, with literally hundreds of companies providing coverage.

Because there is so much variety on the market, you should always shop around when purchasing or renewing your insurance.

  • Third-party: The minimum legal level of cover. This type of policy doesn’t cover your costs if you cause an accident but does cover compensation for any other parties involved.
  • Third-party, fire, and theft: This type of policy also includes cover if your vehicle is stolen or damaged by fire.
  • Comprehensive: This type of cover varies between companies, but always includes cover if you damage your vehicle in an accident. Some companies also offer courtesy cars and round-the-clock roadside assistance, including towing if needed.

#2. Life Insurance Policies

Life insurance protects those who rely on you financially. If your parents, spouse, children, or other loved ones would face financial hardship if you died, life insurance should be high on your list of essential insurance coverage.

Consider how much money you make each year (and how long you expect to work), and purchase a policy to replace that income if you die unexpectedly. Consider the cost of burial, which is an unexpected expense for many families.

Having final expense insurance in addition to your life insurance policy will relieve financial stress on your dependents. In the UK, as in the rest of the world, your career can influence your life insurance premium. If you work in a high-risk occupation, your life insurance premiums will be higher.

#3. Social insurance

The United Kingdom has a social security system that is funded by mandatory National Insurance (NI) payments made by all workers – both employees and self-employed – who earn more than a certain amount.

For employees, the current rate of NI payments is 12% of earnings over £166 per week. Those earning more than £962 per week pay an additional 2% on top of that. Self-employed people pay a different rate.

NI payments in the UK go towards:

  • old-age UK pension;
  • unemployment benefit;
  • maternity benefit;
  • bereavement support payment

#4. Health Insurance Policies

The National Health Service (NHS) in the United Kingdom (UK) provides medical care to all residents, covering everything from doctor’s appointments to emergency surgery. The service is tax-exempt and not dependent on insurance contributions.

However, resources can be scarce, and waiting lists are frequently lengthy. As a result, many people enrol in private health insurance plans, which generally provide faster access to specialists, better facilities, and shorter wait times.

Private healthcare plans come in all shapes and sizes, and the cost is largely determined by your individual circumstances.

Some employers include private healthcare as part of their benefits packages. There are many large companies in the UK that offer health insurance plans, including expat-friendly international firms.

#5. Disability Insurance

Disability income (DI) insurance is a type of insurance policy that provides income to people who are unable to work due to a disability. DI insurance protects people from financial losses if they are unable to work and receive a regular income due to an accident or illness.

#6.  Homeowners’ Insurance

Rebuilding your home after it has been damaged by accident is an expensive endeavour. If you have the proper homeowner’s insurance, the process may be sped up.

Look for a policy that covers the cost of rebuilding the house and replacing your belongings, as well as the cost of living somewhere else while your house is being restored. Remember that because you own the land, the cost of rebuilding does not have to include the cost of the land.

Depending on its age and features, the cost of replacing your home could be more or less than the price you paid for it. Increasing your deductible is one way to get a cheaper homeowners insurance policy in the UK.

#7. Dental insurance

Children under the age of 18 (or under the age of 19 if in full-time education), pregnant women, and those who have had a baby within the last 12 months are eligible for free dental care.

Dental care is available on the NHS, but unlike most other forms of healthcare, you will have to pay. In the United Kingdom, NHS dental care is provided at flat rates ranging from Band One (basic examinations and some emergency treatment) to Band Three (crowns, dentures, lab work, etc.).

Rather than using the NHS, some people opt for a private dental plan. Dental plans are not typically included in private healthcare policies, but you can obtain them through your dentist or through an insurance company. The primary reason for purchasing dental insurance is to avoid being stung by large bills if you require extensive work.

#8. Contents insurance

Contents insurance isn’t required by law in the UK, but it’s a good idea to consider getting it to protect your belongings in the event of an emergency.

Your belongings will be protected against fire, theft, and flooding, but you’ll usually have to pay extra if you want accidental damage coverage or personal possessions coverage – which covers items you take outside of your home.

You can compare content insurance providers online, and the cost of your policy will be determined primarily by the value of the items you want to insure. In 2018, the average cost of this insurance in the UK is around £59 per year.

#9. Unemployment insurance

Private unemployment insurance is uncommon in the United Kingdom. Some people, however, purchase an income protection policy. If you are unable to work due to injury or illness, income protection plans will pay you a percentage of your earnings.

#10. Travel insurance

In the United Kingdom, travel insurance is widely available, with dozens of providers offering packages for single, multi, and annual trips abroad.

While you should always take out travel insurance when leaving the UK, if you have a European Health Insurance Card, you should be covered for emergency medical care in many European countries (EHIC). This is likely to change once the UK exits the EU as a result of Brexit.

If you have a packaged bank account in the UK (which you usually pay for on a monthly basis), basic travel insurance is frequently included as part of your account.

Most travel insurance companies offer a variety of policies, with economy options being less expensive but with higher excess costs. Alternatively, more expensive options typically include more coverage for transportation issues such as baggage loss and flight delays.

FAQs about Top Insurance Policies Worth Having in the UK

How does insurance work in UK?

You usually pay a monthly fee for your health insurance, which is referred to as the premium. If you require treatment that your insurer covers while your policy is active, your insurer will pay. It is intended to provide treatment in addition to the NHS service.

What type of insurances are there UK?

The different types of insurance in the Uk are:

What is insurance in the UK in simple words?

An agreement in which a person pays a company and the company promises to pay money if the person is injured or dies, or to pay for the value of lost or damaged property

" } } , { "@type": "Question", "name": "What is insurance in the UK in simple words?", "acceptedAnswer": { "@type": "Answer", "text": "

An agreement in which a person pays a company and the company promises to pay money if the person is injured or dies, or to pay for the value of lost or damaged property

" } } ] }


Insurance plans will assist you in paying for future medical emergencies, hospitalization, illness and treatment, and medical care. Insurance policies can cover the financial loss incurred by the family as a result of the untimely death of the sole breadwinner.

We also recommend

Leave a Reply

Your email address will not be published. Required fields are marked *