Everyday finances: Myths busted

From Car insurance to Broadband, Travel insurance to Energy. Our experts bust the most common myths to get you a better deal... 


Utilities myth

The energy myth - that appliances don’t use any energy when they’re on standby. Quite simply they do, if that light is on then they are pulling through energy and you are paying for it.

As a guide you’re probably paying about £76 a year and a simple way to avoid that freely, would be to do it yourself, switch it off at the main socket or if not get a standby saver online for about £20 and save you that energy moving forwards. Also from a consumption point of view it helps to protect the environment as well.

Car insurance myth

The one thing you shouldn’t do is stay with your current insurer when your renewal lands on your mat at home.

It’s absolutely critical that you shop around, there will be an insurer out there who wants your business whether it be they’ll give you a better deal at a cheaper price or it may well be that you actually increase your cover for the same amount of money. It’s vital you shop around, don’t accept your renewal price.

Broadband myth

There is one common myth which is that you are guaranteed to get the advertised broadband speed, categorically this is not true.

Last year Ofcom did some research which showed that the actual advertised speed was 7.1 mega bits per second (mbps) while most people in the UK are actually getting 4.1 mbps, so there is a massive difference there.

A few things I would recommend to consumers: make sure you get online and do a speed test to see what speed you are actually receiving – it is worth noting though that main impact is going to be the distance between your house and the exchange, so if you live quite far away from your local exchange your speed is generally going to be a bit slower. However, four or five things you can do around your house now to try and improve your speed, firstly, look at what electrical equipment you have got around your wireless router or your modem, if you have a number of various electrical appliances this will impact the speed you’re getting.

Secondly, test for viruses. If you have got any viruses on your system, that will also make the speed slower.

Thirdly make sure you have updated your browser software, so this means if you are on IE6 (Internet Explorer) for example, update to IE7 or IE8, this will again improve the speed that you are getting.

Finally, make sure that your broadband connection is encrypted correctly, so if you have got a wireless router, nobody else is getting access to your network, this again will make sure that you have got a faster connection.

Travel insurance myth

Now many people think that when they are travelling away that having an EHIC or a European Health Insurance Card – like this one – is all you need for travelling for your travel and medical insurance, let me assure you it is not. Whilst it will give you reciprocal health care throughout the European Union and Switzerland, what it’s not going to do is cover you anywhere else but also there are many things that this card does not actually cover.

Now if you get stuck in hospital, somebody needs to stay with you, it won’t cover their expenses; it wont get you back to the UK once you have been in hospital overseas and its not going to give you anything like hospital benefits to pay for some of those little extras.

So, it is not a substitute for Travel insurance - you need to take that as a full policy. In addition a full policy – like this – is also going to cover you for things like cancellation, personal accident and personal liability, all of which are really important along with your baggage and also with your lost documents or anything like that.

So, when you are travelling away to anywhere in Europe, make sure you have got one of the EHIC cards, back it up with a policy as well because they work in tandem with each other and in fact you will find in many places, without that you are not going to get any treatment at all. Take the two and get fully covered.

Home insurance myth

When you are thinking about contents insurance, these are the items that are within your home that you would typically take with you if you moved and I think there are three areas to think about.

The first is: do you have high risk items? These are items that are of personal value to you and are significantly valuable, and the insurer will apply a single article limit to those items and that’s typically around £1,000 or £1,500. That’s the most they would pay out for those items, should you need to claim on the policy.

So, look around your contents, do you have anything that would fit into a high risk item category, typically things like art, antiques and specify those to your insurer because you need to do that.

Second thing is actually think about the contents you may take out of the house with you on a day to day basis, if you don’t have a ‘personal possessions’ extension to the cover – or sometimes called ‘cover away from home’, should the worst happen and you lose that item or its stolen then there would be no cover under the policy and again that typically covers thing like jewellery, expensive handbags and mobile phones.

And the third area to think about is, there is no automatic contents cover if your house is unoccupied for a long period of time, so if you are taking a holiday that is in excess of 30 days, always check with your insurer that there will be cover in place because otherwise you could find yourself coming home to an empty house, and unfortunately no pay out on a claim.

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