This post follows directly on from my previous post. In fact it was the content of this post that inspired my current views in insurance as a whole.
What student insurance?
After living in Birmingham for my University and renting as a student for three years, I moved to London following a job offer. I now rent a fully furnished flat with three others.
I have few possessions: clothes, kitchen crockery, cutlery and cooking equipment, a second hand HD tv, a laptop, and a phone (that pretty much remains on my person at all times). In all it would probably cost a generous estimate of £2,000 to replace it all.
Being the concerned folks that they are, my parents were horrified to discover that I had no contents insurance for my possessions in the case if theft or damage of my possessions.
Being the respectful son that I am I searched on no less than 4 price comparison websites. The best deal that I managed to find was for £227 per annul. This price was under the assumption that the minimum net worth of my possessions was £5000. I must point out that this was the minimum that any comparison site would allow me to state. Given that the aggregate value of my possessions was £2000, this price for insurance represents over 10% of my contents.
Never needed contents insurance
I opted not to buy any contents insurance. This is because I reasoned that in my area I was not likely to be burgled. Furthermore if I was unlucky enough to be burgled just once in 10 years I would have lost out. This is because if I had insurance and was only burgled once in 10 years, I would have ended up spending more on insurance than I would ever have had paid out in claims. It's a sad situation where I NEED to be burgled a few times to get paid back. Furthermore, having been burgled my annual premiums would increase.
As a result of this calculation I have reasoned that until my contents are worth far more than £5000 it is not worth the money for me to buy contents insurance.
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