Posts Tagged ‘insurance’
Things are getting shaken-up in the world of car insurance. Does it mean cheaper car insurance for all? Of course it doesn’t. Did you have glue for your breakfast this morning because that’s a stupid thing to think.
Basically, the Competition and Markets Authority (CMA from now on) have said that exclusive pricing deals between motor insurers and price comparison websites need to be banned. Basically, because of these deals, insurers are being denied the chance to make their products available for cheaper, elsewhere.
The CMA also noted that consumers need better information on no-claims bonus protection insurance.
This review came about after the Office of Fair Trading asked the CMA to get stuck into the motor insurance market, and after a year of weighing things up, this is what the CMA have come up with.
They say that, because of the deals being struck between insurers and price comparison websites, it is pushing the price of premiums up across the board.
“They certainly help motorists look for the best deal, but we want to see an end to clauses which restrict an insurer’s ability to price its products differently on different online channels,” said CMA deputy panel chairman Alasdair Smith.
The CMA also tossed some work to the Financial Conduct Authority who should be examining how insurers tell consumers about add-on products to car insurance policies and the like.
“The way motor insurance-related add-on products are sold makes it hard for consumers to obtain the best value,” Smith added, with no-claims bonus protection being a particular concern: ”We are requiring insurers to provide much better information.”
Alas, the CMA said that they weren’t able to work a way around the problem of high car hire and repair charges for drivers who were not at fault in an accident.
Fixing that, they say, would require a “fundamental change in the law”.
Sensible travellers know that, when you go abroad, in addition to your EHIC if travelling in Europe*, you make sure you get travel insurance with medical cover because, after all, anyone can have an accident. However, the Financial Ombudsman has noted a growing trend for insurers to refuse to pay out at all if there has been alcohol consumed – even if that is as little as two or three drinks.
While travel insurance cases make up only 2% of the Financial Ombudsman’s work, insurers seems to be getting cheekier with the amount of cases upheld by the Ombudsman rising from 42% to 53% last year. And many of the cases involve a denial of relief, owing to alcohol consumption.
The reason many health claims on travel insurance are denied is because of undisclosed previous medical conditions, and failure to inform an insurer of alcoholism could fall under that category. However, the Ombudsman is now seeing cases denied on the grounds of “alcohol abuse” or “excessive alcohol consumption”, terms which are often undefined and therefore open to the insurer’s interpretation.
Some examples given by the Ombudsman include a woman who needed stitches after banging her head on a bedside table whilst on holiday in Greece. She freely admitted to having drunk two or three drinks over the course of the evening, which rendered her blood alcohol level over the legal limit for driving in the UK. The insurer claimed the injury was as a result of excessive drinking, although they had not defined what ‘excessive’ might be. The Ombudsman felt that two or three drinks over a long evening whilst on holiday and not intending to drive was not, in fact, excessive, and that “people can be clumsy and have accidents even when they’re sober.”
They also found that insurance companies make assumptions, based on age and location. A young man in his twenties was admitted to hospital after collapsing while out at a popular European resort. The reason assumed by the doctor was given as alcohol consumption, so the insurer rejected the claim for medical expenses on the grounds that they had arisen “directly or indirectly from using alcohol”.
However, the Ombudsman does not think it is reasonable for any insurer to assume people will not drink at all on holiday, so the onus was to show whether the admission was caused by alcohol, not merely incidental to it. The medical evidence showed that the young man in question had, in fact, drunk less than the UK driving limit on the night in question, and that an alternative explanation for his collapse could have been down to dehydration. His claim was upheld.
Although, ideally, insurance companies would just settle reasonable claims, it is important to know that the Ombudsman requires the insurance company to prove that an exclusion applies (eg for excessive alcohol consumption), it is not down to the traveller to prove it does not apply. But nor does the Ombudsman uphold every case. Cases that have required hospital treatment to treat alcohol withdrawal were upheld in the insurer’s favour, as the claim clearly resulted from alcoholism notwithstanding the fact that no alcohol had been consumed on holiday. Another case where a traveller sadly died while falling down the stairs was also found in favour of the insurance company when post mortem tests showed blood alcohol levels were sufficient to have caused “severe ‘ataxia’ (problems with balance and coordination) and poor judgement.”
So next time you get blasted on holiday, check your policy exclusions and make sure you don’t injure yourself, or those fishbowls could end up costing more €uros than you thought…
*European Health Insurance Card, previously known as E111. Link to get a free card for the uninitiated is here
If you work in the healthcare sector, you are most likely to be ‘at fault’ for a car accident, according to new research. MoneySuperMarket analysis of over 11 million car insurance quotes has worked out the top ten professions in the UK that make both the fewest, and most, ‘at fault’ claims on their car insurance policies.
Skilled and careful, surgeons are the ones to trust with your bypass, so long as it’s not an A road, as they top the list of those most likely to make an at-fault claim, followed by healthcare colleagues GPs, health visitors and hospital consultants. Suggestions are that healthcare is a demanding and stressful job, thereby leading to more accidents outside of work- the only job outside of health care in top ten is that of probation officer, which seems to support this theory.
However, the table of the ten professions least likely to have an ‘at fault’ claim is more varied, but includes a number of positions ending in clerk, suggesting that administrative roles are less likely to stress people out so much that they crash their car. The list includes building society clerks, typists and funfair employees as being the safest drivers in the UK.
Kevin Pratt, car insurance expert at MSM, said: “It is really interesting to see how much one industry dominates the top ten claims table – it seems those who have the responsibility of saving our lives and caring for our health are the most accident prone drivers. There is no doubt that surgeons, GPs and health visitors are all stressful jobs, so lack of time or tiredness could mean that these drivers are more likely to make an ‘at fault’ claim.”
“Being involved in an accident, no matter how minor, whether you’re at fault or not, can be a traumatic and costly experience. Our research shows the average claim value for an ‘at fault’ accident is nearly £3,000 and claiming for either ‘not at fault’ or ‘at fault’ accidents will drive up annual premiums, typically adding around £33 on average.”
But what good is this to you if you are a healthcare worker? Well, a little while ago, we investigated the cost saving benefits of changing your job for car insurance purposes. We weren’t advocating lying, of course, but if your job could genuinely fit between a couple of definitions, why not go for the one that gives you cheaper insurance- like being a nanny instead of a childminder, for example. And if you could legitimately be described as a packer, a picker or a typist , why not see if it’s also safer on your pocket to be one?
We all know that switching is often a valuable pastime. Switching banks, energy providers and insurers is all the rage these days, as everyone knows you only get the best deals by being totally disloyal.
Or perhaps everyone doesn’t know. New research shows that over half of UK adults haven’t switched any of the 10 most common financial products in the last 12 months and that estimated 10 million consumers (21%) have never switched anything.
Gocompare.com surveyed just over 2,000 UK adults, was commissioned by comparison website Gocompare.com, and revealed that in the last 12 months:
“More people switched car insurance (16%) than any other financial product, but 30% have stayed with the same car insurer for over three years
Despite rising energy prices and energy switching being all over the news and the interwebs, only 15% had changed provider to get a better deal, with a massive 60% having had the same energy provider for over three years.
13% had switched their home insurance, but less than ten percent of responders had switched their current account (7%), their credit card (5%) or their mortgage (2%) in the last year.”
It was a similar story for the never-switchers. The charts of never switched products is topped by bank accounts at number one, down to car insurance at number ten. The full list is:
1. Bank accounts (35% never switched)
2. Mortgages (28%)
3. Broadband (25%)
4. ISA/savings (24%)
5. Landline phone (23%)
5. Mobile phone (23%)
7. Credit card (22%)
8. Energy supplier (16%)
9. Home insurance (14%)
10. Car insurance (12%)
The lack of switching is surprising given the survey also asked whether consumers felt better or worse off than they did a year ago. Almost a third (29%) of UK adults say they feel worse off now compared to a year ago, with 17% admitting that they are seriously worried about the state of their finances. Around half (54%) said things were about the same.
Claire Peate, customer insight manager at Gocompare.com, said: “While many people have become committed comparers, switchers and savers – our research suggests that millions could still be paying more than they need to by sticking with their existing providers. But, in our experience, a common reward for loyalty is a higher price. So shop around for the best deals and if your existing provider seems expensive, switch.”
But should we really bother with the people who never have, and in all likelihood, never will switch? Doesn’t that leave better deals for the rest of us who can be bothered to shop around?
The future of the Association of British Insurers is an uncertain one after one of the main players in it – Legal & General – decided to go solo. L&G decided that it would be in the best interests of shareholders and policyholders if they cancelled their membership.
A few weeks ago, the company said that they wanted the trade body to be “a more forward-looking organisation”, so it isn’t too much of a surprise.
Nigel Wilson, Legal & General’s chief exec, said: “Our public policy work increasingly involves sharing commercial aspects of our business with government, which, for very obvious reasons, not least competition law, we cannot share with competitors.”
“We believe that, increasingly, engagement with government, regulators, quangos and other external bodies will be on a case-by-case basis going forward.”
The ABI have been having a rough time lately as it is, with the insurance industry looking at huge regulatory changes, which include reforms in the last Budget which promised structural changes to the insurance sector.
For the time being, Admiral and Allianz have no plans to ditch the ABI, and it looks like Axa will be sticking with it for the foreseeable future. Aviva and Prudential haven’t given their thoughts on the matter, but if Legal & General start making serious money and having more freedom, are we going to see the insurance equivalent of a Premier League breakaway where they can all start calling the shots more frequently?
Would that be good for consumers? It could go either way.
They’ve said that the recent fall in premiums may be ending, even though regulatory efforts have been trying to bring them down even further.
Admiral’s chief executive, Henry Engelhardt, said: “In the UK there are some signs that premiums are no longer falling but we have yet to see firm evidence of an inflection point and a return to premium growth.”
“Admiral’s premium rates have been pretty flat over the first half of the year, though as a result of the reductions in 2013, total premiums are down around 9% compared with the first half of 2013.”
You see, insuring your car has been a little cheaper since the Government and industry got together and started to come down hard on fraudulent claims (we’re looking at you Mr I Got Whiplash After Someone Took My Wing Mirror Off And I Gasped A Bit Harder Than Usual). With a decline in claims , premiums went down with them.
The Competition and Markets Authority (CMA) proposed imposing a cap on replacement vehicle costs too, which would be passed on to the at-fault driver following an accident, as well as wanted to ban price parity agreements between price comparison websites and insurers.
However, it looks like Admiral & Co have found a way of milking more money out of drivers.
The mid-nineties were dark days. Not just because of Peter Andre and East 17 but also because those were the shady times when building societies forced you to take out their own buildings insurance policies when you had a mortgage with them- at a healthily inflated premium of course.
But in the face of a sledgehammer of legislation to tackle the problem, the practice was dropped, and in today’s more enlightened times, new buyers are free to shop around, using any one of the multiple comparison sites around to secure the best deal on home insurance.
However, there is still an issue for homeowners. Last month comparethemarket.com (the one with the rodents) calculated that, for the‘significant number ‘of people, who have not switched since taking out their home insurance under sufferance through their original lender, they could have saved ‘legacy losses’ totalling around £2.2bn – an average of £1,446 per household over the last 20 years.
Additionally, the cheeky anthropomorphic creatures discovered that some building societies, mostly smaller regional ones, are still levying a penalty charge of up to £45 if you choose not to take out their overpriced insurance.s
Sounds a bit rum. Of course, the building societies can’t actually charge you for not buying their products, that would be madness. What they can do, however, is charge you an administration fee for requiring sight of your alternative insurance provider to ensure that it is, in fact, bona fide. Unlike the admin charge itself.
The comparethemarket.com research found Ipswich building society to be the worst offender in a list of 18 lenders which charge home buyers for daring to choose a cheaper insurance provider.Ipswich charges £45, but out of the other charging lenders, the largest is Skipton, which charges £25.
Simon McCulloch of comparethemarket.com said, based on the mortgage and remortgage market share of those lenders that impose a fee, consumers are collectively paying nearly £2m a year for these charges.
“These charges are essentially a tax on being financially proactive and prudent,” he said. “Shopping around for buildings and contents insurance saves a third of UK households more than £100, which could, for example, pay for your first six months broadband after you move house. But charges like these are designed to put people off doing this and, in many instances, to tie them into more expensive products.”
A spokesman for the Ipswich said: “The society has recently conducted a review of the ‘own insurance’ mortgage fee. The result of this is that we intend to remove this fee for all applications from 1 September 2014.”
A Skipton spokesman said: “There is a charge we make to ensure that if someone buys their buildings insurance elsewhere, we need to check that the property is properly insured.”
And yes, I know they are mammals.
Two out of three people are incensed about paying the sneaky charges hidden in the small print of insurance policies. It’s becoming a thing now to insert charges for cancellations or amendments to your policy and consumers are NOT happy.
A Which!!! survey revealed that nearly half of insurance firms have increased admin fees in the last few years – fees that have no real basis in reality, like a £20 charge to set up a policy or get copies of documents.
So why all the secret fees and subterfuge? Well, it’s those goddamn comparison websites, innit?
Insurance companies want to keep those all important headline fees down, so they have to spread the actual cost somewhere else. It’s also happening with mortgages, credit cards and bank accounts. In fact, it’s like the whole world is turning into Ryanair.
And we’re getting wise to it, too. 68% of those surveyed said they were aware of the manipulative trickery that companies employ to keep headline costs down.
Hit it, Ricardo Lloyd-o! “Consumers are fed up with being hit with unexpected, additional costs for financial products that lead to them paying more than they bargained for. These fees can be hard to avoid, and people often don’t know what they’re really paying for.”
“We want the financial services industry to stop sneaky fees and charges, and put an end to excessive, unclear and hard to compare fees that do nothing to improve the low level of trust in these markets.”
The main problem is with the headings. The FCA says that too much focus is put on the big splashy headline price and the brand itself, and not enough info is given about what you actually get for your money. If you’re looking for home insurance, for example, you don’t necessarily get a full outline of your cover or any indication of whether it’s right for you.
The FCA eyeballed 14 price comparison sites and found that the websites don’t make it clear that they just gather and show all the prices – and don’t necessarily tailor their suggestions to your specific needs.
However, some are very naughty indeed and break FCA rules because they don’t declare potential conflicts of interest – ie, some sites are owned by the very insurance companies they’re trying to
pimp ‘impartially’ suggest.
Clive Adamson from the FCA said: ‘Our research found that price comparison websites are not meeting our requirements in delivering fair and consistent outcomes for consumers. We also found that consumers had a number of misconceptions about the services they provided. It is important for consumers to understand that not all products are the same and the cheapest product may not always be the best for their needs.’
Companies like gocompare.com have said they would look carefully at the report’s findings, just as soon as the corrupt Go Compare man comes back from taking crack at the meerkat brothel.
We’d all like an extra 20% discount on our car insurance, right? Well it seems that some insurers are offering up to a fifth off car insurance premiums for ‘prudent’ people.
Some insurance firms claim that they have found a strong link between people who are prudent with their spending and those less likely to take risks while driving. If you’re careful with your money, you’ll be careful on the road. This means that Lloyds insurance arm Scottish Widows is apparently offering up to 20% off to certain customers who, for example, stay within their overdraft limits, or never need an overdraft, or who never miss a credit card payment.
Of course, this doesn’t mean that renewing car insurance becomes a more labour-intensive process, requiring drivers to detail their financial histories in order to try and get a discount. Instead, this is just part of the ‘big data revolution’ which sees businesses using consumers’ personal information in new and exciting ways. And Scottish Widows aren’t alone.
We’ve known for years that Tesco monitors the shopping habits of Clubcard holders, and Tesco insurance reportedly offers discounts of up to 40% on home and car insurance to those whose shopping habits indicate they would be a careful driver. However, they are not forthcoming on which products are so indicative. Aviva changes house insurance premiums depending on the exact location of properties on a street.
But while no one is going to be miffed at being offered an un-requested 20% discount, as with everything else in life, the fear is that this is, in fact, a double edged sword. While those with ‘good’ financial habits are offered money off, are those struggling to make ends meet going to be penalised even further by higher premiums? Apparently not.
A spokesman for Scottish Widows told the Telegraph that “this use of the data we hold is allowing us to offer discounts on motor insurance to customers who tend to show care in areas like personal finances. But we will not be using this information to increase premiums.” Sounds pretty categoric. For now anyway.
However, privacy groups remain unconvinced, and consider this alternate use of data to be a breach of trust by holders of super-sensitive data.
Emma Carr, acting director of Big Brother Watch, said: “Despite this being within the law, the way many companies go about doing this is underhand and goes far beyond what customers would expect them to do with their data.” She called on insurers to give customers the option of explicitly opting-in to the use of big data rather than just allowing them to opt out, if consumers are even aware of how businesses are using their data.
So what do you think? Is it OK so long as it only confers positive benefits, or will the sharp side of the deal inevitably turn up before long?
From taking bulbs out of tail lights so that people crash into you, to simply railroading pregnant women in cars on purpose: there’s a myriad of choices for the petty criminal about town.
And now the Association of British Insurers (ABI) is saying that detected insurance fraud reached record heights in 2013 an 18% increase on the previous year. £1.3bn was paid out in dodgy claims involving fake car crashes and car insurance scams last year.
Crash for cash scams are rife all around the country, and that causes everyone’s wallets to suffer from whiplash, too. It’s been estimated that fraudsters are costing households £50 extra a year on their insurance premiums.
As well as professional crash for cash scammers, fake car insurance claims rose by 34%, with people claiming they had injuries and later being filmed playing golf and dancing the pasa doble.
But although attempted fraud has gone up, the ABI added that overall the number of successful fraudulent cases has gone down, thanks to better reporting and investigation.
Malcolm Tarling of the ABI said: ‘The number of detected frauds is rising; that’s because we are getting better at detecting staged accidents. We are going to continue to tackle fraud – that’s what our honest customers expect us to do.’
Hmmm. So if actual fraudulent claims are down, why are our premiums still up?
Insuring your vehicle is a dear-do, and the competition in car insurance is hotter than ever. With that, Admiral (who also own Confused.com) have noticed that their sales are falling across the group.
There’s been a 6% increase in customers, but a 7% fall in sales, so to keep some customers, and maybe win some more, Admiral have decided to reduce premiums by 11%.
Chief executive Henry Engelhardt said: “The UK car insurance market remains competitive and consumers continue to benefit.”
“We continue to focus on customer service and retention and as a result we were pleased to grow customer numbers by 2 per cent in the quarter. Growth outside the UK remains strong and we are happy with the progress we are making.”
It’s a good time to switch if you’re unhappy with your current package.
A recent report showed that, across the whole sector, premiums in the UK car insurance market fell by 19% in the first 3 months of 2014 compared with last year. Shop around and, if you’re going to use a price comparison website, use more than one because some are owned by parent companies who make sure cheaper rivals don’t appear in their results, ahem.
With fraudulent car insurance claims on the up, Swiftcover have become the first insurer to offer reduced premiums to people with dashboard cameras – so they can obtain concrete evidence and settle claims quicker.
They reckon it’ll save you £33 a year, but of course, you’ll have to buy the dashcam if you don’t already have one, which will cost you about £25.95. So it’s not actually worth it. But it IS making THEIR life easier!
Roman Bryl from Swiftcover.com said: ‘We believe that by using a dashcam and being able to accurately and quickly establish who was at fault, we will save money and therefore motorists will significantly benefit from lower premiums and more responsible driving.’
So, er, YOU’RE not going to save money. Well, perhaps a little under a fiver a year. But it would make them happy and save them money. Hmmm. Something tells me they’ve not really thought this brilliant offer through. If it’s so important to have visual evidence of liability when you claim, why don’t they just give you a free one when you join?
But, if you’re really hellbent on that 10% discount, perhaps you could make some of your money back by using your dashcam to make dogging films. Or, if you’re super amazing musician Kim Deal, you could use it to make an awesome lo-fi music video, like this one.
(Just a thought.)
Successful home insurance claims aren’t just about humdrum leaky pipes or articulated lorries crashing into the front of your house. At the RIAS, amongst the 400,000 insurance claims they receive a year, there’s a regular stream of wild and wacky incidents involving babies vomiting on laptops, badgers chewing through masonry and squirrels breaking windows.
In their top ten of strange claims, a snail ate £78 worth of carpet at a man’s house in Preston, a pigeon fell down a chimney and destroyed the carpet, ornaments and sofa, causing £8000 worth of damage, and a woman locked a badger in her shed, which then ate through her wall. There was also the deer who fell into a swimming pool.
But the piece de resistance has to be the dog from Galashiels, who saw another dog on the telly and TRIED TO JUMP THROUGH THE SCREEN.
With the weary air of someone who has seen it all before, Peter Corfield, managing director of the RIAS said:
‘Sometimes it’s the most unlikely events that can end up causing real damage. Not all claims are straightforward and sometimes we do see some bizarre scenarios. But, saying that, babies and animals are often the culprits.’
It seems even the legal system is getting tired of spurious whiplash claims these days. We’ve all been paying through the nose for those poor unfortunate people whose entire soft-necked families happened to be in a car that received a rear-end shunt, but now it’s all become too much even for a High Court judge.
Hearing the case of two women making a personal injury claim against the Home Office after a vehicle incident, Mr Justice Mostyn dismissed the claims as inaccurate and evasive, saying they were based on “an improper pecuniary motive.” Or, in other words, that they were thieving liars. Allegedly.
The court heard it took 18 days for one of the claimants to complain to her GP about any pain, and the other waited a week before she went to her doctor to report any injury as a result of the impact. Both women were, however, assessed by a medical ‘expert’ despite there being no visible damage to the car after the accident and the fact that neither woman reported any injury at the time or asked for time off work. Two other people in the car at the time of it hitting a bollard at slow speed, the driver and front seat passenger, miraculously escaped completely unharmed.
The judge took particular offence at the medical ‘evidence’ as it was so similar it “cast doubt on the professional objectivity of the expert.” In perfectly identical terms, medical reports said both had suffered “nervous shock and psychological trauma” and endured “recurrent obtrusive memories of the accident and obsessional thoughts as to how she might have been seriously injured” by a rogue bollard, prowling the streets looking for innocent victims.
Justice Mostyn did not mince his words:
“It is proper that I should go on to record that I do not accept the evidence of either of them, which I find to be inaccurate, evasive, partial and advanced for an improper pecuniary motive,” said the judge. ”This is yet a further example of the national phenomenon of false whiplash claims being made and it is in an attempt to stem the tide that I do not shrink from making firm adverse findings against them”.
He added: “Obviously it is, in terms of probability, almost inconceivable that each of these women would have suffered physically or mentally in precisely the same way.”
Of course, anyone who has genuinely suffered from whiplash as a result of a car accident will know how genuinely painful it is, and no-one, not even Justice Mostyn, is saying those genuinely injured shouldn’t be able to make a claim. However, first-hand experience of such ‘medical experts’ does back up the judge’s opinion, particularly where medical reports contain evidence that cannot possibly have been collected during the 3 minute examination- reports that are, as a matter of course, not challenged by insurers where whiplash is the main stated injury.
But until someone can come up with a pregnancy-test style wee-on-a-stick test for genuine whiplash, we are left relying on judges to make sensible outcomes from stupid claims in the forlorn hope that it will deter fraudulent claimants from wasting everyone’s time and money.