Insurance protects you and your belongings from the financial cost of something going wrong.
It can’t stop bad things from happening. Clearly. But if something unexpected does happen – such as a burglary, a car accident or an illness while you’re on holiday – it means you won’t have to pay the full financial cost on your own.
Insurance is all about managing risk. There are some instances where insurance is compulsory. For others, it will depend on your circumstances, how you feel about risk and how much risk you’re prepared to take.
Here’s an introduction to the most common types of insurance to help you work out which ones you might need.
Bear in mind that some bank accounts offer insurance, for example travel, breakdown or mobile phone cover, as part of their package of benefits. So before taking out a new policy, it’s worth checking to make sure you’re not already covered elsewhere.