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Lesson 6 of 8 · 14 min

Insurance explained: compare cover, not just price

Premiums, excess, exclusions and limits explained, with a method for comparing policies fairly at renewal.

In this lesson you will

  • Explain premium, excess, cover limit and exclusion
  • Understand how a higher excess changes the premium
  • Compare two policies on cover as well as price
  • Prepare for a renewal so you are not overcharged

Education, not advice. This lesson explains general ideas and does not consider your personal situation.

Why insurance is hard to compare

Insurance is one of the few things people buy hoping never to use. That makes it easy to buy on price alone and discover the details only when making a claim. Understanding four terms changes that.

The four terms that matter

Term Meaning Example
Premium What you pay for cover $480/year
Excess (deductible) Your share of each claim First $250 of any claim
Cover limit The most the insurer pays Up to $20,000 contents
Exclusion What is not covered Accidental damage, unless added

Level 2: Budgeting & Cash Flow

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  1. 1Your cash-flow calendar14 min · Free
  2. 2Budgeting on irregular income15 min
  3. 3A savings system that runs itself13 min
  4. 4Planning debt repayment with real numbers16 min
  5. 5Understanding credit reports and scores13 min
  6. 6Insurance explained: compare cover, not just price14 min
  7. 7Sharing costs fairly: couples, housemates and families12 min
  8. 8The annual money review13 min

Budash Academy and the Budash blog are for general education only. They are not financial, investment, tax or legal advice, and they do not take your personal circumstances into account. For advice, speak to a qualified, regulated professional.