Life constantly presents us with new challenges, and the risks we face evolve as we move through different stages of our journey.
Insurance is fundamentally about managing those risks — which naturally shift with changes in your personal circumstances.
It’s crucial to remember that insurance coverage only applies if you’ve purchased a policy and the claim falls within your coverage period.
When to Purchase Insurance
The timing of buying insurance depends largely on what you want to protect and where you are in life.
Often, insurance is obtained when acquiring a new asset, like a car, home, or boat. Securing insurance before exposing that asset to risk means you transfer potential financial loss to the insurer.
For instance, before driving your new vehicle, you’re legally required to have motor vehicle accident personal injury insurance. You might also choose to get comprehensive car insurance or third-party property cover, depending on which risks you want to shift to the insurer.
Many insurers can set up car insurance quickly over the phone, providing a policy or cover note immediately.
If you skip comprehensive or third-party property coverage and then get into an accident, you won’t be protected against damage to your vehicle or someone else’s property, which could result in significant financial strain.
Life Changes, Insurance Needs Change
Your insurance priorities when you leave home and start your independent life will be quite different from those you have later, when you might have a partner, children, and a mortgage. Those priorities will likely shift again as you approach retirement and your children move out.
As your life evolves, so do your finances and insurance requirements. You may purchase a new house or car, start a business, relocate, buy new furniture, or take on loans.
Since we all face various risks over time, it’s reassuring to know there are many insurance options designed to protect your lifestyle from the risks that matter most to you.
If there’s a significant financial risk to you or your assets, insurance is generally available to cover it. Keep in mind that insurers offer a range of policies, coverage levels, and premiums.
For more complex needs or expert advice, insurance brokers specialize in risk management and can guide you through the different products available. Financial advisers may also provide valuable support.
Buying Insurance Ahead of an Event
Certain insurances, like travel insurance, are best purchased early—often right after you’ve paid your trip deposit. Doing so can activate cancellation cover immediately and typically doesn’t add to the overall cost.
Understanding Insurance Embargoes
Insurers sometimes enforce embargoes on policies to prevent people from buying insurance when risks are heightened—such as during approaching natural disasters—and then cancelling after the danger has passed.
These embargoes are a standard and accepted practice, usually applying to new policies when events like fires, floods, or cyclones threaten an area.
When a risk is imminent, the likelihood of claims rises, meaning insurers must adjust premiums to reflect the increased danger rather than averaging the risk over an entire year.
However, not all insurers impose embargoes. Australia’s insurance market is competitive and diverse, so even during embargo periods, some providers may still offer coverage to property owners.
