Vehicle insurance related costs soar

It has been revealed in a recent report that costs relating to insuring cars and other vehicles have soared in the UK over recent months, resulting in many drivers who may already be struggling financially due to the cost of living and petrol prices finding it even more difficult to keep their vehicles on the road.

According to the report the costs associated with insuring a car or vehicle in the UK have increased by more than 14 percent in the second quarter of this year. The figures have come from the EMB Car Insurance Price Index and the online insurance comparison site Confused.

The rise in costs associated with insuring a car are much higher than the increases that were seen in the final quarter of last year and the first quarter of this year. In the last three months of 2009 costs relating to insuring a car increased by 4.3 percent, and in the first three months of this year the costs relating to insuring a car increased by 6.3 percent.

The massive increase in costs of over 14 percent seen in the second quarter of this year has resulted in around £74 being added to the average cost of car insurance for drivers. This reflects a total increase of 31 percent according to figures, and brings the average annual cost of car insurance to £599.

Some areas saw costs relating to car insurance rise more than others, and amongst those to be hardest hit were inner London and Manchester. Insurance officials have also said that this is not the end of the bad news for drivers, as many believe that the cost of vehicle insurance could continue to increase, which would mean even higher premiums for many cash strapped drivers.

Tags: end, car insurance, Insurance, United Kingdom, quarter, premiums, Vehicle insurance, second quarter

Understanding the Truth About Insurance

Insurance is very complicated and many people do not understand their policies, partly because of the terminology and partly because of some of the myths surrounding insurance policies. Read more

Tags: MYTH 2, insurance tips, Insurance, premiums, act, glass

Recession causes insurance fraud to soar

According to a recent report the level of insurance fraud has been rocketing as a result of the bleak financial climate and the recession. A report was recently released by the Association of British Insurers, and officials from the ABI have said that in 2008 the number of attempts to defraud insurance companies increased by 17 percent compared to 2007. Read more

Tags: Recession causes insurance, insurance cheats, premiums, road, Association of British Insurers, insurance claims, insurance fraud, report

Flooding costs to affect insurance premiums

The UK has seen some of the worst rain and floods in years over the past few weeks, and for many this has resulted in severe damage to their property and huge insurance claims.

Many insurance companies have been inundated with claims following the flood damage, and millions of pounds worth of claims have had to be processed and paid out. Insurance companies have stated that the level of claims coming in has been high and the payouts have made a big dent.

The recent flooding is said to have been the worst in the UK for around sixty years, with many households devastated by the damage caused. A number of leading insurance companies are now stating that they will have to push the cost of premiums up because of the level of claims that have had to be paid out as a result of the flood damage. Both contents and buildings insurance cover is now expected to rise as a result of the situation.

One of the leading insurance companies in the UK, Norwich Union, has confirmed that its premiums will be going up. From next week those taking out cover with the insurance giant can expect to pay around 10% more than previously. All customers will be affected by this price increase and not just those that were hit by flood damage and had to therefore make a claim on their policies.

One insurance company official stated: “People are spending more on home improvements. When things go wrong they’ve got flat-screen televisions and expensive flooring. So, when the do damage, it’s costing us more.”

An official from Direct Line insurance stated: “We do recognise that premiums will rise, and that goes for all RBS brands.”

Tom Smith
19th September 2007

Tags: claim, flood, increase, payments, cover, cost, premiums

Life insurance customers must be honest

Customer honesty is imperative when taking out a life insurance policy, an Independent Financial Advisor (IFA) said today.

While customers might be tempted to try to keep premiums as low as possible through selective disclosure of facts, this might well prove costly in the long run.

Kieran Platt, who also co-founded the website Life Direct, strongly recommends that “whatever the situation is when you apply for your policy, you must be totally honest”, with the possibility of claims being invalidated otherwise.

Giving the example of a claimant going wreck diving – “perceived to be high risk” – he pointed out that dangerous hobbies must be declared at the outset.

However, Mr Platt said that taking up a potentially premium-boosting activity such as a high risk hobby after filling the form in would not affect life insurance, provided it could be proved that at the time of taking the cover out it was not being practiced.

“Life policies are underwritten at outset: it’s the complete opposite of income protection insurance, where you have to go back to the insurance company anytime anything changes… With a life policy you don’t, it’s all done at the outset”, he surmised.

Recent figures from life insurers Bright Grey show that around one in three British families do not have life insurance, critical illness or income protection cover.

Tags: Kieran Platt, income, claimant going wreck, Insurance, activity, income protection cover, life insurers, premiums

Middle classes fiddle insurance claims

Although many of us are led to believe that fraudulent activities are usually conducted by those from lower income families, a recent report has suggested that many illegal activities in this field are actually committed by middle classes, particularly fraud such as inflated insurance claims.

The results from the survey suggested that a high number of middle class policyholders inflated insurance claims in order to improve their homes or simply to get back at the insurance companies for having to pay high premiums.

The survey was conducting using nearly 2000 respondents from across England and Wales. The report was compiled by Professor Susanne Karstedt and Dr Stephen Farrall of Keele University. Although other types of ‘white collar crime’ were also highlighted in the report, one of the significant types of crime that middle classes admitted to was fiddling insurance claims.

One official stated: ‘Politicians from across the political spectrum regularly claim that most crime is committed by a hard core of offenders, largely drawn from low-income groups. This research demonstrates that volume crime is far more widespread, with the middle class being responsible for a wide range of illegal activities. The reasons for this are complex, and relate to the fundamental social changes in British society over the past 30 years.’

One professor involved with the study added: ‘Contempt for the law is as widespread in the centre of society as it is assumed to be rampant at the margins and among specific marginal groups. Anti-social behaviour by the few is mirrored by anti-civil behaviour by the many. Neither greed nor need can explain why respectable citizens cheat on insurance claims or in second-hand sales, and do not hesitate to discuss their exploits with friends in pubs.’

Tom Smith
15th July 2007

Tags: sales, survey, car, class, house, home, claim, middle

How Do Insurance Companies Work Out Premiums?

The winning number is…

As you wait for the insurance sales person on the other end of the phone or over the counter to come back to you with how much your insurance premium is going to be it’s rather like entering an unfortunate lottery. Quite how they work out the cost of insurance sometimes seems like anybody’s guess. Read more

Tags: level, accident, cover, premiums, Insurance, charge, home, calculate

Ex-smokers pay less for insurance

England is set to go smoke free by the end of this week (July 1st) and many smokers may find that kicking the habit will benefit them in more ways than one.

As well as the money saved on not stumping up for cigarettes, ex-smokers will also see the premiums they pay for life insurance plummet.

The average 35-year-old male who regularly lights up can expect to pay around £13.50 per month for a £100,000 term assurance policy providing cover for 20 years.

However, if the same person were to quit smoking, within a year he would see his monthly payments fall to around £7.90.

“This shows just how important it is to shop around for an annuity which meets your individual needs and also takes into account lifestyle or health issues,” commented Matt Ward from financial research company Defaqto.

Insurance firms require applicants to have been smoke free for at least a year before they can be considered an ex-smoker and it is not easy to pull the wool over their eyes.

Many insurance firms carry out a cotinine test which detects nicotine in blood, urine and saliva.

Tags: policy, smoke, Human behavior, premiums, plummet

Insurance premiums could fall for those with penalty points

In the past UK motorists that have clocked up penalty points on their driving licences have seen the cost of their vehicle insurance premiums rise quite considerably as a result of this.

However, according to recent reports from insurance companies points that have been accrued through speeding will no longer result in rising premiums, as speeding will no longer be viewed by insurance companies as signifying that the driver is a greater risk on the roads.

Insurance companies have revealed that points accrued through speeding have become so common that there is little point viewing these drivers as a greater risk on the roads. This means that many UK drivers with points on their licence as a result of speeding may find that their insurance premiums start to fall. Some insurance companies have announced that those drivers with up to nine points on their licences will now be treated as those without any points in terms of insurance premiums.

In the past, these drivers could have seen their car insurance premiums rise to four times the amount of standard premiums. Swinton Insurance has been the first to make the announcement about the fall in insurance premiums for those with points, and it is expected that other insurance firms are set to follow in the footsteps of the insurance giant.

An official from Swinton Insurance stated: ‘Penalty points used to be the yardstick for dangerous drivers, but with up to 10million drivers collecting them, they are so common place that they have almost become pointless. We will be looking at each driver as an individual and not automatically upping the cost of their premium if they have six penalty points on their licence.’

Tom Smith
4th June 2007

Tags: dangerous, Insurance, fall, collect, points, speeding

How To Reduce Your Family Car Insurance Premiums

If you are a family with children in their late teens (i.e. 17,18,19) or early twenties (20-25), then a dilemma you no doubt have already had to face if how to reduce your family car insurance premiums. The following are a few tips on how you may achieve this: Read more

Tags: blanket insurance policy, insurance policy, premiums, name, reduce car insurance, Admiral Group, family car insurance, Human Interest

Shopaholics Should Include Insurance on the List

The average yearly UK car insurance premium is £460 with a difference of £110 from most expensive to least. This rate reflects a premium for the same make and model vehicle, driven by the same driver, living in the same towns and cities. Shopping around for insurance is worth the time. Read more

Tags: shop around, shopaholics, competitive insurers, premiums, Insurance, insurance carrier, average car, cheapest deal

Common Car Insurance Questions

Like any specialist area in financial services there can be a wealth of information which simply goes over the head of the typical customer. For car insurance this can be from terminology used such as ‘no claims bonus’ or the why’s and where-fore’s of procedure (example: ‘How exactly do I make a claim?’). To help as best we can and clear the head of online users seeking car insurance we have answers to the typical question that are posed. Read more

Tags: premiums, company, Types of insurance, liability insurance, drive on, driving accidents, typical question, car insurance questions

Motor insurance set to rocket in the UK

Motorists in the UK are set to face huge increases in motor insurance over the next year according to recent reports relating to some of the larger motor insurance companies in the UK. It has been reported that the biggest motor insurer in the UK could be whacking up the cost of premiums in 2007, increasing the gap even further between the prices from some major insurers and some of the cheaper motor insurance companies.

Unfortunately, the large rise in premiums could mean that those companies currently seen as budget insurance companies, which are able to offer huge discounts, could also be forced to push up premiums, making it even more costly to own and drive a car in the UK. Norwich Union has already raised premiums by up to forty percent over the past few months, and other major players are set to follow.

The largest motor vehicle insurer, the Royal Bank of Scotland, is now set to follow suit and push up its insurance premium rates, and smaller companies could follow. One spokesperson from the Admiral Group stated: ‘We believe Royal Bank of Scotland Insurance is the decisive factor in taking the market up in price. If it were to sustain a series of increases over the next 12 to 18 months, that would take rates up substantially.’

According to statistics forthcoming rises could push up an average insurance premium of around seven hundred and fifty pounds to around nine hundred pounds. Officials from the Royal Bank of Scotland Insurance stated that the rises were largely due to the heft cost of claims that had been made over recent years. An AA spokesperson also spoke about the rises, stating: ‘You will find people will shop around even more now. The market is going to be even more polarised between the highest and lowest prices.’

Tags: increase, claims, motor, car, accidents

Consumers could save money on home insurance

A number of studies carried out in relation to consumer trends with buildings and contents insurance have shown that a large percentage of consumers could save a small fortune on the cost of their insurance premiums by taking a few simple steps. A recent survey was carried out by Tesco, and the results indicated that many consumers could be paying up to twenty five percent too much on their premiums for buildings and contents cover.

In many cases consumers are failing to shop around for good deals on home insurance cover simply because they think that they have to take the insurance cover that is offered by their mortgage provider, which is not always the case. The head of insurance at Tesco stated: “Many consumers are apathetic about their home insurance or believe it is an integral part of their mortgage. Others suspect the saving made by shopping around won’t be worth the effort but that isn’t true.”

As part of a survey, around 125 consumers were asked to shop around when it came to renewing their home insurance, and out of these a quarter discovered that they were paying around seventy five pounds more than they needed to on the cost of their premiums. The other seventy five percent from the survey also discovered that they could make some form of saving on their cover simply by shopping around.

In addition to shopping around, Moneysupermarket.com has advised consumers to ensure that their home is made secure through the fitting of security locks, burglar alarms, and other security devices, as this could also help to slash the cost of insurance premiums through reduced risk. Consumers may also find that purchasing a combination package of buildings and contents cover could save them money on the overall cost of their home insurance.

Tags: home, Insurance, premiums, buildings, security, payments