The car insurance industry’s dirty secret…

By Emma on June 30, 2011

You may have seen reports and discussions in the news this week around personal injury claims.

The process by which personal injury lawyers acquire personal customer data has recently come under the spotlight. Customer details, such as phone numbers, are often passed onto to these personal injury lawyers by car insurance providers and even by the police in return for a referral fee.

The former justice secretary, Jack Straw, has recently spoken out against these referral fees – which he describes as a ‘huge racket’. Insurance companies, he claims, can make between £200 to £1000 per referral.

He has condemned this practice by some insurance companies, branding these referral fees as the ‘industry’s dirty secret’. Recovery firms and police are also accused of making money through referrals. It has been reported that West Midland police made £622,275 in one year from referral fees.

The increasing ‘no win, no fee’ culture has apparently led to a huge increase in personal injury claims and, in turn, a hike in car insurance premiums. Justice minister, Jonathan Djanogly, said that the current system gave people a ‘perverse incentive’ to make unjustified claims. Conveniently, around 80 per cent of all claims are for ‘whiplash’ which cannot be detected by scans or X-rays.

In the past 10 years, the cost of personal injury claims has doubled from £7 billion to £14 billion and car insurance premiums have risen by more than 30% in the last year alone. There’s a sharp hike in insurance costs despite the fact that the number of road traffic accidents involving personal injury has actually fallen.

Jack Straw has also hit out against the aggressive tactics used by personal injury firms – such as harassing calls and a barrage of text messages. I personally get a text message every other week inviting me to make a personal injury claim. I haven’t even had an accident!

The government has vowed to address this referral system, stating that it is a priority issue for them.

Have you ever experienced harrassment from personal injury firms? Tell us about it in the comment section below.

Also, check out our no hidden surprises promise.

Of late, we’ve really seen some weather extremes – from boiling hot sunshine to lightning and torrential rain.

Towards the end of last month, the extreme weather caused some widespread chaos.

When the lightning hit recently, the news was full of ‘storm chaos’ stories from up and down the UK.

The extreme weather has unfortunately caused both damage to property and people. Lightning strikes were reported at a tower block in the east end on London causing a blaze on the 17th storey. Elsewhere in London, a crane operator fell to his death in the Olympic village after torrential rain caused him to slip from a ladder.

In Suffolk, Sussex and Kent, lightning was reported as setting fire to some homes. Fires were also reported due to the searing 90F heat wave.

This week, sun worshippers are being warned that the hot weather could be coming to an end. More unsettled skies are due this afternoon – with a wetter, windier conditions towards the end of the week.

Unfortunately, our plans and our homes are often at the mercy of external conditions.

We can of course take precautions, but sometimes unexpected weather can result in costly repairs.

What to do if your home is damaged by extreme weather…

Here are a few pointers:

• Check the full policy wording of your home insurance. Most policies will include cover for storm and flood damage. Read all the details carefully as there may be some exclusions.

For example, some areas of your home – like patios, gates and driveways may not be covered for storm and flood damage. Be aware that some policies may also exclude frost damage entirely from their cover. There might also be some particular conditions around wind speeds – if in doubt, call your insurer directly to talk it through.

• Always take photographic evidence of any storm/flood damage caused to your home. This may be required as proof when making a claim.

• If the damage requires immediate repair work – always inform your home insurance provider of this work before it’s carried out. Make sure you keep any receipts.

• It could be wise to keep any proof you have of the bad weather/flash flooding/lightning. This could be in the form of video footage or local news reports.

• Decide whether making a claim is worth the potential extra cost to your premium. It may be better to make small, low-cost repairs out of your own pocket rather than filing a claim.

Recent research from AXA has revealed that burglars tend to head for house number 88. Strange as it may seem, their research reveals that this house number appears to be the most attractive for uninvited, law-breaking intruders.

You may have thought that the traditionally unlucky number 13 would have been most at risk – but in fact, according to the research, it’s around half as likely as 88 to be hit by thieves.

According to the insurer’s research, other popular house numbers in the burglary line-up are; 80, 68, 91, 96, 13, 73, 79, 77, 78, 83, 87 and 98.

So, what other traits are there for house break-ins? Is your home top of the burglary hit-list?

Where you live can affect your likelihood to be burgled. Last year, Yorkshire Bank conducted an analysis of crime statistics to reveal the areas with the highest and lowest burglary rates.

Unsurprisingly, the City of London had the highest burglary rate – in fact, the rate of burglary per 1,000 people was more than four times higher than the UK’s national average. Burnley, Manchester, Nottingham and Bristol made up the other top 5 burglary hotspots.

The crime statistics for your local area can affect the risk profile of your property. This is why your postcode has some bearing on your home insurance premium.

With the introduction of the online crime mapping from Police.uk, you can now view crime data for your local area at street level. For more on this, see our past post: Crime postcode checks; are they any use?

Security features are an obvious deterrent, a burglar is far more likely to target a property that has no evidence of an alarm or security light.

In research carried out by Halifax last year, it appears that more modest semi-detached properties worth around £153,000 are an ideal target for thieves.

This is supported by further recent data from AXA which shows that those living in semi-detached houses are more likely to be the victims of a break-in than terraced or detached residents. A purple front door, apparently, also seems to attract thieves.

A survey of criminals on remand showed that would-be thieves look out for an area that’s nice…but not too nice. Rather than swanky city apartments or large, high value properties – a middle class semi detached is the perfect picking. Swankier, higher value properties are often not targeted for the the fear of top of the range security features that make them trickier to break into.

Game consoles, mobiles and jewellery were found to be top of the shopping-list for intruders – so make sure these items are always stored out of sight.

If your home appears unoccupied, it could well encourage an opportunist burglar to target your home. Always give the impression that your house is inhabited when you’re away on a trip. This could involve putting your lights on timers, cancelling any daily milk/paper deliveries and asking a neighbour to check on your home and draw the curtains.

The lowdown on the EHIC

By Emma on July 13, 2011

The EHIC (European Health Insurance Card) is a travel essential when holidaying in certain countries. We’ve written in the past about why the EHIC is not a substitute for travel Insurance, but what does it actually do?
What’s covered?

Well, as a resident of the UK, you’re entitled to necessary state-provided healthcare when travelling temporarily to a country within the EEA (European Economic Area) or Switzerland. To ensure you’re eligible for this medical care if you need it, it’s important to carry a valid EHIC.

If you have an accident or suddenly fall ill, you’ll receive the necessary state-provided medical healthcare at a reduced cost, or sometimes for free. The level of treatment you receive may vary between countries.

You’ll be treated on the same terms as a resident of the country you’re in. You may have to pay a patient contribution (also known as a co-payment) but you might be able to seek reimbursement for this when you return home.

The EHIC can also include treatment of a chronic or pre-existing medical condition that becomes necessary during your visit. The card can also ensure you receive routine maternity care should you need it at any point in your trip.

However, it’s probably more important to note what’s not covered by the card.
What’s not covered?

It shouldn’t be seen as a replacement for travel insurance. There’s no guarantee it will cover all the treatment and care you need – so you could be faced with additional large medical costs.

Private treatment will typically not be covered by the card either.

Be aware that the card will not cover you for any treatment that you go abroad specifically to undertake. This includes giving birth.

In addition, there are other large costs that can be associated with falling ill/being injured abroad that will not be covered by the EHIC.

For example, if you or a member of your family are not well enough to fly home – Your EHIC would be of little use in funding accommodation costs so the ill/injured individual is not left alone.

If you need to be flown back to the UK by air ambulance – the EHIC would be of no use either.

To ensure you’re fully covered for a medical emergency, it’s important to also take out comprehensive travel insurance.

And remember, if you already have one of these little cards tucked inside your wallet – make sure you check the expiry date as they do need to be renewed.

Also, if you’re travelling in a group – everyone over the age of 16 will need their own individual card.

You can apply for a free EHIC here.

Why insurers care about climate change

By Emma on July 14, 2011

It’s not difficult to understand why insurance companies are concerned about climate change. Their model is based on risk assessment, risk mitigation and capital accumulation. Climate change poses a very real risk to insurance companies.

Uncertain and unsettled weather patterns and natural disasters can equal large-scale chaos, loss of life and widespread damage to land and property. This in turn can equal large insurance pay-outs.

With their expertise in risk analysis, insurers are therefore well placed to lead the fight against what’s arguably the largest man-made risk of our time.

Of course, insurers have a financial interest in climate change, with their business model and potential losses at the mercy of climate and the weather. Increasing emissions can lead to drastic changes in our atmosphere with weather patterns becoming increasingly extreme.

Just a 10% increase in hurricane speeds could see annual damage costs double.

Hurricane Katrina, for example, saw the US insurance industry left with over 1.7 million insurance claims across six states. It has been reported that the insurance industry paid out about $41.1 billion dollars.

Closer to home, flooding in Cumbria in 2009 resulted in around 25,000 flood and storm damage insurance claims. According to the Association of British Insurers, around £174 million was paid out.

Over the past few years, the insurance industry has become increasingly proactive on climate change. In 2007, a worldwide initiative driven by leading insurers was set up to help reduce climate change.

Leading insurance firms (such as Aviva, AXA, Allianz and Standard Life to name a few) came together to form ClimateWise.

With their experience and expertise in risk analysis, this collective aims to help governments and consumers alike to make informed and educated choices to help reduce climate change.

This involves incorporating climate change into their ongoing strategies, both from an underwriting perspective and in the investment of premiums received. The objective is to reduce economic risk associated with climate change.

The key aims of ClimateWise are to:

1. Lead in risk analysis
2. Inform public policy making
3. Support climate awareness amongst customers
4. Incorporate climate change into investment strategies
5. Reduce the environmental impact of their business
6. Report and be accountable

More information about the initiative can be found here.

To find out what you can do to help climate change, check out the European commission’s campaign website.

You can also find lots of useful, everyday eco-friendly tips on The Energy Saving Trust website.

Last week, Chris and Colin Weir from Ayrshire were named as the winners of the £161m Euromillions jackpot.

The prize is Europe’s biggest ever and was capped after a series of roll-overs. The win places them 430th in this year’s Sunday Times rich list.

So, rather than weeping bitterly while tearing up your non-winning ticket; perhaps it’s time to start thinking of a more viable business venture to make your fortune?

Success has to start with a positive and determined outlook. I’ve scoured the web to bring you a few pearls of wisdom for getting into that millionaire mindset.

There’s an abundance of business advice out there, but one thing remains consistent – to really make your millions, you need to start truly believing that you will.

Think and act like a millionaire:

Although luck and timing can have a big impact on success, there are some certain traits that are common amongst people with huge financial success.

Forbes magazine (leading American source for reliable business news and financial information) featured an article last year based on interviews with numerous billionaires and business people worth over $100,000. The findings were distilled into the 3 simple secrets of those who’ve earned large amounts of money.

Secret 1: Take risks and don’t be limited by the fear of failure. All the interviewees said that they’d had a choice to stick on an easy, secure route or take calculated risks. They took the risks.

Secret 2: Think differently and creatively. Everyone believing or doing something doesn’t make it right. The interviewees revealed how they looked at problems from different angles and liked to go against the grain.

Secret 3: A supportive partner. Most of those interviewed, especially the self-made millionaires, claimed that a supportive spouse had been critical to their success. Belief and support from your partner can be essential in riding out the rough patches.

Build a network:

Business needs good relationships to succeed. Start building and expanding your network and establishing sound relationships with potential clients, partners and customers.

Although the web presents a huge scope for virtual communication – a lot can be said for old-fashioned face-to-face communication. Get in a room with the people important to the success of your business.

Hone your communication skills so you make an immediate impression and a lasting impact.

In the early days, prepare a thirty second pitch that details what you do, what you offer, your business idea etc… so it’s ready to go should you need it. Talk to as many influential, useful people/organisations as possible and get your name and business cards out there.

Tips from the dragons:

When it comes to entrepreneurship and succeeding in business – the ‘dragons’ (from BBC programme Dragon’s Den) know a thing or two. Here are a few tips straight from the dragon’s mouth:

‘Successful business people take decisions all the time. If you can’t make decisions then you can forget it. Businesses often flounder because their ‘leaders’ can’t decide what to do about the simplest of things, so they do nothing. The world is constantly changing, businesses need to evolve too. Doing nothing is the worst business decision you’ll ever make.’ Deborah Meaden.

‘Be results orientated, this will help you to be more motivated and leave you with a sense of achievement when you reach your goals. Think carefully about what you want, and then focus on how to get there. You’d be amazed at how many people don’t do this’. Peter Jones

‘Work in a subject area that you love. Understand the detail – if you are new, there are many sites like Businesslink and smarta.com that are full of useful tips and advice.’ Theo Paphitis.

Wedding a wash out? Can your wedding insurance pay for bad weather?

By Emma on July 20, 2011

After a promisingly sunny Easter, this year’s summer has been pretty non-existent – or more specifically, extremely wet. Over the last couple of weeks, most parts of the UK have suffered a deluge of torrential rain.

Yes, it’s a little depressing and may have disrupted a few weekend BBQ plans – but spare a thought for the poor couples whose wedding days have been substantially damp.

With weather patterns becoming increasingly unpredictable, is there anything you can do to prevent the pains of bad weather on your special day?

Of course, there’s no method for controlling the weather unfortunately. If the sun shines on your big day it’s a bonus; if it pours with rain – it’s unlucky. However, some wedding insurance policies could offer you cover for more extreme situations.

For example, if severe weather causes the closure of your chosen venue (for example, due to flooding) your wedding insurance may be able to help you manage some (or all) of the associated costs.

The inaccessibility of a venue due to bad weather could force you to change the location of your wedding last minute. This could mean that you lose money you’ve already spent while also having to pay out additional money to secure an alternative.

Wedding insurance could certainly come in handy should disaster strike in this way.

The level of protection will vary between policies and not all wedding insurance will cover the same eventualities. Make sure you read the small print, so you’re confident that your policy is suitable for the needs of your particular celebration.

Also, check any protection that you might already have in place. Paying with a credit card can offer some security, as you’re normally able to claim money back from your credit card provider if there’s a problem with goods or services.

In addition, many contents insurance policies will automatically give you a higher level of cover around your wedding day to help ensure your gifts are fully protected. Although, do note that this will only be for a temporary period.

Don’t forget to take out your insurance policy as soon as you’ve put plans in place. Most policies will not cover you for known conditions – for example, if a snow storm is forecast for your wedding next week – you couldn’t quickly take out a policy with that knowledge.

With many UK weddings hitting the £20,000 mark, it could be wise to put some form of cover in place. It won’t guarantee you bright blue skies, but it could prevent the dark cloud of disappointment.