New insurance companies are popping up all the time and judging by the amount of advertising they buy they are lush with money. So how do you avoid buying share holders of insurance companies a new Ferrari with money you could have spent on your child’s education? There are four easy steps to ensuring that you are not paying more than you should be for your insurance policies.

Set a date at the start of every year to review your insurance policies. Insurance companies are quick to increase premiums, but never reduce them willingly even though they know that there clients are overpaying. Every year the value of your vehicle decreases and should you have an accident and need to replace it, your insurance company will pay out for the current value of the vehicle and not the value assigned when you took out the policy. The catch is that even though the value of the vehicle decreases, your premium stays the same unless you prompt your insurer to adjust it. Your own circumstances might also change over time which could result in you paying too much. For example, you may have sold an expensive household item that was originally included in your home insurance policy. You need to annually review the items in your possession, assess there value and adjust your insurance accordingly.

If you have opted for an insurance package or have been offered one by your insurer, be sure to read the fine print. Packages are often aimed at specific groups of people like for example a women’s only package. These types of packages can be tempting because the marketing message of the package relates well to the target audience. If you are a woman and you are not insurance savvy, then an insurance package that says "For women" is an appealing choice. However, the problem with packages is that they often include cover for items or risk that you do not need. If you are tempted by a package then carefully go over the items listed on it before signing.

By assessing your risk adequately you can avoid paying for cover that you do not need. If your home is in an area that is free of floods then there is no need to have cover for this type of risk included in your policy. Sit down and make a list of risks that you are susceptible to and make another list of risks for which you are currently covered. If you are paying for unneeded cover then adjust your policy and reduce your premiums.

Finally, get a professional to help you if you are unsure of your insurance needs. A financial advisor or insurance broker can help you assess your needs. They can also source quotes from a variety of insurers for you to compare and explain confusing insurance jargon. Some insurance policies contain tricky clauses could leave you without cover. A broker will be able to point out these types of clauses and advise you on how to maintain your eligibility for cover should you need to claim.