Insurances you can and can’t live without

When it comes to insurance, you might be tempted to cut corners and save money. But imagine suddenly finding yourself in a crisis with no safety net?  

That’s what Ashley Surcombe, a British influencer, is facing right now. The 29-year-old has been hospitalised in South Korea after being found unconscious in her apartment.  

Her health insurance had recently lapsed, leaving her family to cover a £3,000 upfront deposit for treatment. The ICU care could cost up to £1,500 per day, with additional tests and general hospital stays pushing costs even higher.  

The family has launched a GoFundMe to help pay for the escalating medical expenses.  

This tragic situation highlights how vital some insurance is. But are there some policies you could do without?  

Axing insurance policies to trim budgets  

As the cost of living continues to rise, many people are looking for ways to cut costs. And insurance is one area where people are trimming their budgets.  

In the second half of 2022, over three million people cancelled at least one insurance policy to save money, according to the Financial Conduct Authority’s Financial Lives survey.  

But, as Ashley Surcombe's situation shows, not having insurance can leave you with a hefty bill if something goes wrong. 

So what types of insurance do you absolutely need and which ones could you potentially forgo? 

Must-have insurance  

Car insurance  

If you drive or own a vehicle, you must have car insurance. It’s the law. You need at least third-party insurance to cover any damage or injury you cause to others.  

And this extends beyond driving. If your car is parked on the street, in your driveway or in a garage, you still need cover.

Home insurance  

While home insurance isn't legally required, it’s crucial if you're a homeowner. Without it, you’re risking a financial disaster if something happens to your home.  

If you’re getting a mortgage or refinancing, most lenders will require buildings insurance as part of the deal. This is because they’re at risk too, as their money is secured against the property. 

Home insurance typically comes in two forms: 

• Buildings insurance covers the physical structure of your home. 

• Contents insurance covers your personal items inside. 

Ideally, you should opt for a combined policy that covers both. 

Insurances you might not need 

Life insurance  

Life insurance is an important option for those who have dependents or a mortgage to cover, but it's not mandatory.  

You should ask yourself - if you were no longer around, would your family be able to manage without your income?  

If the answer is yes, life insurance might not be necessary. But if it’s no, it’s probably worth considering.  

It's also worth noting that premiums tend to be higher the older you get, so it may be wise to lock in a policy earlier in life. 

Renter’s insurance  

If you rent a property, there’s a good chance your landlord will have insurance, but it won’t cover your personal belongings. 

While renter’s insurance (sometimes called tenant’s insurance) isn’t a legal requirement, it can save you from financial losses if disaster strikes, especially if your belongings are damaged or stolen. 

Self-employed income insurance 

If you're self-employed, you may want income protection insurance. This type of cover helps if you're unable to work due to illness or injury.  

But it can be expensive and you’ll need to assess whether it’s worth it, based on your work and your financial situation. Consider how long you could survive without an income before making a decision. 

Travel insurance  

While not compulsory, travel insurance is recommended for any trip abroad. The UK Global Health Insurance Card, the replacement for the European Health Insurance Card, only covers basic healthcare.  

It won't cover repatriation costs or most emergencies, so travel insurance is important for peace of mind. Plus, it can cover cancellations, delays and lost luggage.  

Health insurance  

Thanks to the NHS, UK residents have access to free healthcare. If you're happy using NHS services, private health insurance isn’t a necessity.  

But if you want quicker access to certain treatments or prefer more flexibility, private health insurance can offer those benefits.