Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
8 Questions to Ask Before Buying Any Insurance Policy
Moneymagpie Team
11th Jun 2025
Buying insurance can feel intimidating, but it doesn’t have to be. Whether you’re getting coverage for your car, health, home, or life, asking the right questions upfront can save you serious money and protect you from nasty surprises down the road. Here are eight essential questions before you sign any insurance policy.
- What Does This Policy Actually Cover?
- What Are the Exclusions and Limitations?
- How Much Will Your Premium Be?
- What’s a Deductible and How Does It Work?
- Are There Any Hidden Fees or Penalties?
- How Do Claims Work?
- Is the Policy Renewable?
- Are There Discounts Available?
- Endnote
What Does This Policy Actually Cover?
Before purchasing a policy, ask your agent or insurer to break down exactly what’s included and what’s not. For example, does your homeowner’s policy cover floods? Does your health insurance cover specialist visits? Getting this clarity upfront prevents you from being stuck with unexpected bills later. It’s one of the most overlooked topics in many insurance FAQS, yet it’s the foundation of your coverage.
What Are the Exclusions and Limitations?
Every policy has things that aren’t covered. This might include certain types of damage, medical conditions, or situations like war or intentional harm. Be sure to ask about all limitations so you’re not blindsided when filing a claim.
How Much Will Your Premium Be?
Depending on the policy type, your premium can increase due to age, claims, inflation, or other risk factors. Ask how often it’s reviewed, if there are rate guarantees, and if there’s anything you can do to lower your premium. This isn’t always made clear unless you push for specifics.
What’s a Deductible and How Does It Work?
A deductible is what you pay out of pocket before insurance kicks in. Policies with lower premiums often come with higher deductibles. Be honest with yourself and ask if you could comfortably pay the deductible amount in an emergency.
Are There Any Hidden Fees or Penalties?
Some insurance policies come with admin fees, cancellation fees, or penalties for late payments. Ask for a breakdown of any extra charges upfront. This can be especially relevant for life insurance or investment-linked policies, where early withdrawal penalties or maintenance fees can quietly eat into your returns.
How Do Claims Work?
A solid insurance policy is only as good as its claims process. Ask how you file a claim, how long it takes to get paid, and what documentation is needed. Check if claims can be submitted online and if there’s 24/7 support.
Is the Policy Renewable?
Some policies automatically renew, while others require you to reapply. That can mean higher rates or even denial if your health or risk profile changes. Ask whether your policy is renewable and under what conditions. Don’t assume long-term coverage unless it’s stated clearly in writing.
Are There Discounts Available?
Yes, insurance companies often offer discounts, but they won’t always volunteer them. Ask directly about discounts for bundling, being claim-free, installing safety features like smoke detectors or anti-theft devices, or even maintaining good credit. These can lower your premium significantly. It’s a smart tip you’ll find hidden in many insurance FAQs, but often ignored in real conversations with agents.
Endnote
Buying insurance is a big decision, but when you ask the right questions, you make a smart one. These eight questions help you avoid traps and make sure you are truly protected. Don’t be shy about pressing for clear answers, this is your money, your protection, and your peace of mind.
- Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.
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