An increasing number of insurance applicants telling lies

Every year many people apply for a variety of different types of insurance cover in the UK, from home and car insurance cover to life and income insurance cover. However, according to recently released figures there has been a sharp increase in the number of people that are telling lies on their insurance application forms in order to get a better deal on the cost of their insurance cover, and officials have stated that it is the honest consumers that are going to end up paying for these lies. Read more

Tags: application forms, insurance lies, finance, abi, insurance fraud, cost, driver, United Kingdom

ABI: Don’t just go for the cheapest home insurance

With one in three households getting into arguments with their neighbours, people should not simply choose the cheapest home insurance policy as it may not cover the legal cots of a dispute, says the Association of British Insurers (ABI).

Kelly Ostler-Coyle, spokesperson for the ABI, advises people to consider what is covered in the insurance policy rather than simply choosing one based on cost.

Ms Ostler-Coyle, says that when shopping for insurance, people should ask themselves “Does it include legal cover? Does it have all risk extension fees so you’re covered for your items when you’re outside the home and how much [in terms of] belongings am I covered for?”

Yet people often take what they believe is a good deal without taking any advice and later find their claims rejected since the insurance policy they chose does not cover issues such as disputes, says an expert.

Over a million people say they have argued with their neighbours over noise, according to a new survey from Allianz Insurance.

Tags: Social Issues, Business and Economy, Allianz Insurance, British Insurers, expert

Financial websites increased awareness of need for life insurance

Financial websites have helped raise awareness of the need for consumers to take out life insurance, according to insurance experts.

The Association of British Insurers (ABI) said that websites are useful for those consumers who know what sort of life insurance policy they need.

Those that are not aware of the products available should speak to a financial advisor says the body.

However, Nick Kirwan, head of health and protection insurance for the ABI, said: “Anything that helps to spread the message among consumers and provide choice to people… has to have contributed in some way to helping raise awareness.”

The ABI estimated that one in three Britons have no life insurance – and a further one in three have not renewed their life insurance cover for five years, so may be underinsured.

Meanwhile, back in 2005 the Telegraph reported that Swiss Re, the world’s largest life and health reinsurer, estimated that there was a £2.3 trillion ‘protection gap’ between the expenses of UK families and what was actually covered by life insurance policies.

Tags: Association of British Insurers, websites increased awareness, advisor, abi, trillion, policy, business, message

Majority prefer printed bank statements

Managing your finances online may be a growing trend, but the vast majority of people still prefer to put their faith in the printed word and the postal service.

A new survey on consumer attitudes towards banking has found that almost nine out of ten people (88 per cent) still prefer to receive bank statements by mail, and that the post remains the favoured means of communicating about financial matters for 70 per cent.

Even amongst those who are keen on internet banking, 68 per cent still like to see a physical copy of their statements drop through the letterbox.

A similar proportion (67 per cent) find it easier to understand their bank statements in print than on screen.

The research has been carried out by the Henley Centre for Royal Mail.

Abi Wood, Head of Financial Marketing at Royal Mail commented on the findings, saying: “Internet banking has undeniably revolutionised modern financial services as more consumers want the accessibility it provides.

“However it is clear that traditional communication methods are still incredibly important to individuals of all age groups. Banks should continue to investigate the different and complementary roles that the different channels play for the modern consumer.”

Tags: trend, post, Banking, Financial services, abi, online, Marketing

ABI calls for increased help with flooding problems

June and July of this year saw heavy rains and bad weather really take their toll in some areas of the UK, causing billions of pounds worth of damage to home and resulting in rocketing numbers of insurance claims that have cost the insurance companies dearly.

Claims for damage to home have been flooding in since June, and insurance companies have had to pay out millions of pounds each in some cases to cover the cost of the claims.

The Association of British Insurers is now calling on the government to provide increased protection against future flooding, stating that although the government has planned to put aside funding for this problem around £150 million more is needed to minimize the risk of this situation arising again in the future.

Stephen Hadrill, director-general of the ABI, stated: “The scale and impact of the floods has been massive. The cost to the industry of over 60,000 claims is approaching £3bn and more claims continue to come in.”

In a letter to the Environment Secretary, Hillary Benn, the Association of British Insurers stated that some drains and watercourses were blocked as the result of poor maintenance.

The letter stated: “Some defences will have been put under great pressure in recent events and will need to be checked and possibly strengthened.”

The ABI also stated that “an urgent review is needed of how best to maintain urban and rural drainage”. 

Mr Hadrill said that this should include “whether expenditure is adequate, and how to co-ordinate better modelling of flood risk and planning of alleviation measures.” A number of areas of England were particularly hard hit in June and July as torrential rain caused major flooding across the country. As a result of the claim levels from the flooding insurance companies have had to hike up rate by up to 10% in some cases.

More info: www.abi.org.uk/floodinfo

Tom Smith
5th September 2007

Tags: flood, rain, Insurance, downfall, british, torrential, abi

Insurance policyholders could be paying out million to compensate for fraud

According to industry professionals holders of UK insurance policies could collectively be paying out millions upon million of pounds simply to compensate for fraud levels losses.

Experts claim that policyholders could be shelling out four million pounds everyday simply to make up for the financial losses that are caused by fraudulent claims that are made to insurance companies.

The data comes from the Association of British Insurers, and the ABI states that over one and a half billion pounds is paid out by honest policyholder each year to make up for the cost of fraudulent claims made by millions of others. Around five million people have admitted to making a fraudulent insurance claim in the past. This adds an average of forty pounds a year to the cost of cover according to the Association of British Insurers.

The insurance fraud relates to different types of claims. Some people cheat their insurance company by making a valid claim but inflating the amount that they are claiming for. Others actually take out insurance cover for the sole purpose of making a fraudulent claim so that they can cash in their cover – this is known as ‘planned’ insurance fraud.

Around £8M had to be paid out in extra premiums by honest policyholders last year to make up for claims where the amount had been inflated by the claimant. Around fifty percent of fraudulent claims relate to home and contents insurance cover.

One spokesperson from the ABI stated: “These figures highlight that greater deterrents, such as criminal prosecutions, are needed to discourage fraud. This is why we are calling for police forces to be given more resources so that fraud can be treated with the seriousness it deserves.”

Tom Smith
23rd May 2007

More Information:

• What is Insurance?

Tags: police, Insurance, increase, cover, abi, inflate, fraudulent, contents, damage, claims

Young drivers offered premium break

A leading car insurance firm is offering young drivers a financial break if they sign up to its Safe Driving Agreement.

NFU Mutual is offering youngsters a £100 discount on premiums if they sign the document which requires them to take care on the roads.

As part of the deal, drivers will promise to adhere to the rules of the road, only drive at certain times and avoid eating and smoking at the wheel.

“They must promise to confirm their destination in advance, to drive only between agreed times of the day, to ensure they and their passengers always wear seat belts, never drink or take drugs and drive… not use a mobile phone whilst driving and avoid being distracted through fiddling with the stereo,” said NFU Mutual’s Laura Wood.

The deal has been drawn up in conjunction with the Royal Society for the Prevention of Accidents and follows a speech by the Association of British Insurers (ABI) which called for more action from the government.

Ms Wood added: “Young drivers are more likely to crash than older more experienced drivers, in part due to their lack of driving experience but also due to their attitude to the road and being unaware of potential dangers.”

Young drivers generally pay higher insurance premiums as they are deemed to be more likely to be involved in an accident.

Tags: whilst, Traffic collision, advance, NFU, document, abi, care