Why forgetting about insurance is costing you money

Katies-Head-Shot-TempBy Katie Smallwood

Chartered Accountant, mum of 2 kids

 

Set and Forget… and Lose 

There is a certain trap that households often fall into; in fact it’s a something that I have just dealt with myself. It’s the ‘set and forget’ mentality. It’s almost like once the chore of setting up health insurance/mobile phone contract etc. is done we mentally cross it off our disappointmentlist of things to do…for a few years! Then, when the contract period is over, we tend not to notice or not ask for a better rate. We don’t even research other options, which may be available and it’s costing us…big time!


 

Many years ago I got a great deal on health insurance. In fact ‘I’ didn’t even get the deal – I just separated from my parents account in the same fund and continued on my merry way! I then had two cesareans in private hospitals worth tens of thousands of dollars and I only paid five hundred each time. So I continued to feel like I had a great deal in health insurance. Except I didn’t…not by a long shot. It was only lately, when I noticed that my premium was going to be an eye-watering amount of money each month that I finally decided to have a look and see what else was around. Two weeks later and I’m saving nearly one hundred dollars a month, and getting far better extra benefits! The amazing thing is that, because I’m over 30 and I’ve had health insurance ‘forever’ I also don’t have any waiting periods in my new fund.

‘Two weeks later and I’m saving nearly $100 per month!’

Providers of services are making it more and more easy to change between amongst them as well. Often it’s a 100dollar note oldmatter of paying a penalty to break the contract. And while it might seem silly to contemplate paying a couple of hundred dollars to get yourself out of your electricity contract, in some cases the savings you will have outweigh this cost.


I think the true cause of this ‘set and forget’ isn’t laziness – it’s a supreme lack of time to sift though the masses of information out there to find that sweet deal. Luckily there are now heaps of websites that will compare different offerings over a range of providers. There are industry-specific ones like ‘iselect’‘Compare the Market’ or ‘Electricity Watch and there are more general ones like ‘Choice’.

Wherever you decide to start your research it’s important to check the fine print to make sure the deal you find isn’t too good to be true. You also need to keep in mind that any savings you think you will have are only beneficial if you stay in the new provider over a period of time. It becomes counter productive if you find your new favourite hobby is hunting a great deal and spend thousands in fines for savings that you never realise.


 

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