Dr Crane says: avoid the pain of being uninsured

Frasier usually generates a laugh or two chez Bien and last week's episode of the Channel 4 show was no exception.

The psychiatrist was horrified to discover that his home contents insurance policy had expired and invited a claims adviser round to calculate how much cover he needed. Unfortunately, this awful woman - who had been on an unsuccessful date with Frasier in the past - slipped on a dollop of mayonnaise that his father Martin had dropped on the floor and broke her leg. Convinced she would sue him, given her line of work, and realising that he had no cover, Frasier tried to keep her sweet by asking her to stay for a few days to recuperate.

The best bit was when she found out that this fear of litigation, rather than romance, was the reason Frasier was being so nice. She declared she would sue, leaving him hugging his expensive coffee table and squashy designer sofa in desperation, pleading with her to have mercy and let him keep his things.

She did back down eventually and Frasier escaped an expensive lawsuit. But lack of insurance is no laughing matter, even in this country where we have less of a claims culture than in the US. Insurance can seem like a waste of money unless you have to make a claim, and with premiums rising every year, it can be tempting to cut back on cover to save cash.

But such a move could prove short-sighted if you are the victim of theft or have an accident. Whether it's insuring your new iPod - a popular target for muggers - or ensuring your travel policy covers you for snowboarding if that is what you plan to do on holiday, the need for adequate cover is everywhere you look.

Insurers are adding to the panic by warning of rising claims: Sainsbury's Bank Home Insurance cautioned last week that subsidence claims are likely to increase further this year, even though September and October 2003 saw a 10-year high in claims. Partly that's because the true cost of last year's claims is only now being confirmed since it normally takes six to nine months to determine whether the damage is permanent.

Bad subsidence can be devastating, even if you have buildings and home contents cover, particularly if you have to move out for several weeks while repair work is carried out. But at least you won't have the extra stress of having to foot the bill as well. If you didn't have insurance, you would feel a lot worse.

Halifax General Insurance also warned last week that mobile phone theft is still rising. It doubled last year, the Halifax says, and it could become even more prevalent this year. In the first quarter of 2004, claims were already 13 per cent higher than in the corresponding period for 2003, despite the establishment of a National Mobile Phone Crime Unit and industry measures to (finally) prevent the use of stolen mobiles.

While both insurers have something to gain by frightening customers into taking out cover, there is a serious point here. Having adequate insurance is vital and assessing your cover on an annual basis is a good habit to get into. As well as checking that you aren't paying over the odds, you should ensure you still have enough cover, for circumstances change. If you've recently become engaged, for example, you may have a sparkler that should be included on your contents policy. Alternatively, you may have upgraded your laptop in the past year and it might not be fully covered away from the home.

Using a broker is the best way to get a good price for the right cover. If you have access to the internet, you could look on broker sites comparing the cost of financial products, such as www.insuresupermarket. com or moneyfacts.co.uk.

You can also reduce the cost of your insurance by stepping up security on your home and car. If you can afford a higher excess - the amount you have to pay when you make a claim - this will also reduce premiums. However, if you opt for a £250 excess rather than £100, for example, make sure you can afford to pay it in the event of a claim.

And while you should ensure you've got enough cover, there's no point having more than you need. Your mobile phone or luggage may be covered by your contents policy, for example, so check before paying twice.

m.bien@independent.co.uk