Elderly travellers suffer from ramped up premiums

Resent findings have shown how travel insurers are taking advantage of elderly travellers by assuming that they should pay a higher premium. Elderly people who go on holiday and who are in their late 70s or early 80s are charged higher travel insurance fees in comparison to people who have jut retired although the cost for covering their trips having fallen.

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In general, there is a trend that travel insurance gets more expensive as people get older due to the increase in the likelihood for an accident occurring or a medical problem happening while abroad. As a result of this, elderly people are a higher risk than younger holiday makers and as such they have to fork out more money to get insured.

However, an analysis of claims and the insurance market has shown that people in their late 70s are far less likely to make a claim in addition to the cost for compensating each claim being smaller. Statistics showed that a 61-year old had a 7.2% likelihood of claiming under their travel insurance policy while an 81 year old holidaymaker had only a 4.3% chance.

The founder of Fairer Finance, James Daley, which focuses on compiling data said that under the normal circumstances of how the market works and how insurance premiums are calculated one would expect for the cost of travel insurance for the elderly to fall. However, according to the analysis the premiums continued to rise.

The average annual premium for a holidaymaker aged in the category 76 to 80 paid a fee of £80 while people 10 years younger would only have to pay £68 for their premium. On the other hand, travellers going abroad in their 80s would fork out an astonishing £132 for insurance cover. Mr Daley stated that he believes the insurance market is taking advantage and cashing in on consumers’ expectation that the prise of insurance increases with age rather than it being based on statistics.

Mr Daley continued by saying “insurers have got you used to paying more, so they continue ratcheting up premiums even though costs fall. The irony is rarely lost on the newly retired – just as they have the time and money to travel, their insurance premiums go through the roof.”

An ABI spokesperson justified the fees by saying “some older travellers may continue to buy annual policies because of their convenience, but take fewer holidays, resulting in a lower claim frequency and average claim per policy.”

Law to make flood insurance cheaper

The government is aiming to make flood insurance more affordable for high risk households and now this will become a law after clearing Parliament. Thanks to a bill passed in Parliament, flood insurance for homes at risk areas will become cheaper.

This particular Water Bill was passed by the Commons after MPs accepted changes to the legislation made by peers in the House of Lords.

The law is designed to bring a levy-funded reinsurance scheme which should make insurance affordable in areas which are exposed to high flood risk, known as Flood Re. also the scheme seeks to add greater competition into the water industry. However, the legislation has met some opposition during the different parliamentary stages, especially from Labour. Labour has pointed out that nearly 200,000 homeowners will face difficulties to get insurance and pay higher premiums once the current deal ends. Nevertheless, Ministers have claimed that this will have a positive impact on household bills by reducing them.

1According to Floods Minister Dan Rogerson, all contents policies would be eligible for Flood Re. it does not matter whether they are leasehold or freehold, rented or owner-occupied, they only have to be built before January 1, 2009 and in council tax bands A to G. Since leasehold houses are also included for Flood Re, it will be expected that the leaseholder lives in the property and purchases the buildings insurances in their own name. Flats are also included as long as there are no more than three flats in the buildings and that the freeholder or someone with a share of the freehold live in the building and take out the cover.

The government has been urged by the Conservatives to take out the number of flats and consider what most working families are living in.

Overall, this is a complex issue and the government is trying to find a long-term solution which will be affordable, comprehensive and not a burden on the taxpayer.

Life insurance will cost 20% more for women

The reason for the more expensive life insurance for women is the EU Gender Directive. Since the implementation of this Directive in December 2012 women are paying nearly 20% more for life insurance.

The reason why this happens is that according to the EU Gender Directive, insurers can no longer consider gender as a determining factor in the price of insurance premiums. Until now, women have been used to benefiting from lower life insurance premiums because they tend to live longer than men which make a payout during the duration of the policy less likely to happen.

At the end of 2012 right before the directive was going to get into power, there was a growth in sales because people hurried to buy insurance policies while they could still take advantage of differential prices between men and women.

Lifesearch has research which shows that in 2013, the cost of life insurance premiums both for men and women altered by up to 20%. For example, the research results showed the highest rise of life insurance was 20.4% for a 20-year-old female who smokes and who bought a 35-year term policy with a sum assured of £91,000. Comparing the cost of the insurance policy before and after the directive, it would have been about £6.08 per month before and now is £7.32. On the second place with a high increase comes a 25-year old female who also smokes and has bought a 35-year policy and assured a sum of £330,000. Before the implementation of the directive the cost would have been £19.82 while now is £23.83 which shows 20.2% rise.

Nevertheless, it is worth noting that not all women have experienced rise in the prices of their life insurance. Rather it depends on the individual and in particular, younger women have seen the highest increases.

At the same time, prices for men are falling. For example, a 50-year old non-smoking male who had a 20-year policy and an assured sum of £230,000 experienced a 21.5% fall in price. In other words, the price per month for him fell from £56.05 to £43.45.

Despite all those facts, there are predictions now that even though prices rose for women by nearly 20%, now things are settling down again. Nevertheless, we need to keep in mind that life insurance prices depend on many factors, such as the amount of cover you want, age, health and lifestyle. Thus, it is always worth shopping around before choosing a life insurance policy.

PPI – Is it an Insurance for Life?

Have you ever pondered about the information that is given to you when you take out a Payment Protection Insurance (PPI) policy? How much information do you require when you are made to take a decision regarding your PPI? These two questions are important when it comes to confront possible problems related to PPI claims in the future.

What PPI is about?

Payment Protection Insurance or Loan Repayment Insurance was created to insure the loan’s repayment in case of unanticipated events such as death or illness of the borrower. There are cases when the borrower loses his job, therefore PPI should cover a minimum part of the loan. But is this what really happens? There are times when people complain of PPI fraud.

PPI Claims

Everyone agrees that PPI is a useful concept but why you do not especially ask for it when signing a loan contract? This fact adds up a high number of claims over the assurance monthly cost which was not the same as estimated in the agreed contract. On further investigation, it was proved that many PPI policies were mis-sold and not requested by the consumers. They claim that they are a victim of PPI fraud. This is basically because they are paying something that they did not choose to avail in the first place.  They are entitled by law to get the money they have paid in PPI premiums refunded back.  For help with this, see go to the PPIClaimsAdviceLine website.

Also, fortunately in 2011, the Competition Commission extended an investigation order for which the mis-selling of PPI could be prevented.

Customers wanting to take out a loan are strongly advised to read the contract details carefully and choose precisely what they need.

The Advantages of Private Health Insurance

If you decide to get a private medical cover, you may receive a lot of benefits such as gym memberships or cinema tickets, while at the same time it does not cost that much.

The common belief is that private health insurance is not value for money and is too expensive. In order to try to change this view, a few insurers have introduced cheaper policies or added perks. Generally, this means that the insurance costs less or the total value of the package is greater than you imagine.

1Here are a few ways how to get cheaper cover:

First of all, shop around. Insurance policies often have many similar aspects, but still it is worth paying attention to the differences.

One way to make big savings is to choose a cheaper or budget plan. Also, you can increase your excess or limit your choice of hospitals. Another way is to agree to go to a NHS waiting list, but only in case the waiting period is less than six weeks. Furthermore, you can agree to pay some of the treatment by yourself or to be paid an amount of money by the insurer and to do the shopping for treatment yourself. Another option is to look for plans that offer cashback because you lead a healthy lifestyle.

Always remember to read the small print carefully and ask about everything that you are not sure or do not understand. Also, make a careful calculation before making a final decision on the cover.

In order to attract new customers, a lot of insurers add extra benefits. They can really save you money, depending of course on the life you live and the interests you have.

Some of the benefits that are offered on the market are free cinema tickets or discounted gym membership. If these are things that you usually enjoy doing, then you can make great savings by adding them to your private health policy. However, if you are not going to use those benefits, then it will be a waste of money. So consider carefully all the attractive offers beforehand.

Car Insurance Tale-Tales

Car insurance can be a cloudy and mysterious topic surrounded by many tale-tales of cheap car insurance just by fiddling with the form. Common sense would point lead you to conclude that the less miles you put you will be covering in a year, the less time you actually spend on the roads and the fewer accidents you end up having – the less costly your car insurance will be! Yet you couldn’t be more wrong if you tried! Some insurance companies believe that the fewer miles a driver does in an insurance year, the less experience he has and so you pose a bigger threat and are costlier to insure that someone who has gained skill and experience through driving greater distances.

Another great myth which is not applicable for many insurers is the assumption that if you keep your car under lock and key in an indoor garage, your premium will fall. Yet many insurers believe there is a greater risk of your car being damaged while parked in a garage than it is if it was left out on the street. Furthermore, voluntary excess has traditionally meant that the higher you set it, the less cost the insurer incurs and so the premium they offer you will be cheaper. However, that is not the case. Although higher excess removes some of the risk factor away from the insurer it all depends on the driver. The Association of British Insurers says that a high excess for young drivers may well mean nothing to an insurer due to the excess covering only a fraction of the possible pay out.

The biggest myth about car insurance however comes along with the assumption that the cheaper the car the cheaper the insurance and that your premium goes up according to the cash value of your car. In fact insurance is valued according to the car’s age with older models being less secure and as a result costing more to insure. Experts in the industry say that there is no difference in the premium of a car costing £1000 and a car ten times its value. However, if you have £5,000 car and insure it for double its value then your insurance will inevitably be more costly as the insurer will assume you have made modifications to the car.  With all the myths busted, the only way to find the best quote for you is to keep pumping different details into the comparison sites until you get a premium you’re happy with.

Young Drivers – Beware of Rough Insurers

Scam websites have been found to be offering car insurance covers tempting to young drivers which promise a cheap quote with a well-known insurance company on sites such as Gumtree.com. Little do they know, buyers of such schemes could end up picking up a criminal record as opposed to a cheap car insurance quote. The fraudsters mainly target young drivers who are more vulnerable and willing to sign up to anything which offers them a bargain on their car insurance. It is a fact that those with less experienced are made to suffer from high insurance premium by the industry. The typical customer for such expensive monthly premiums are usually college and university students who are itching to have a set of wheels at whatever cost it takes.

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Fraudsters who take advantage of the market rate for inexperienced drivers often pose as middlemen who can slash the premium cost and often operate from a residential address and are certainly unregulated. This ongoing and lucrative crime has been the central focus of the Insurance Fraud Enforcement Department which in a series of raids, arrested 27 suspects on relation to their dodgy broker dealings last October. Later that month, two of the suspects were convicted and jailed in what has been described as the biggest insurance scam that has taken place in Britain. The two convicted men have been discovered to have made £500,000 between them by scamming an estimate of 600 young drivers into purchasing fake policies which have no value or authenticity attached to them.

One of Britain’s leading car insurers, AA, stated that their fraud department on average tackles more than 10 rouge brokers from trying to obtain car insurance every day. Among some of the most common practices which rogue brokers use is where they create a fake policy for a customer which is based on a duplicate of a real insurance policy. This way of being scammed is the easiest to avoid since the customer can check whether their vehicle is insured by checking askMID.com which is the UK’s motor insurance database. Another common trick in the book for fraudsters is where they take out a real insurance policy on behalf of the customer but where they have the certificate sent over to their address. Here the broker poses as if he will be the middle man and hand over the certificate to the customer upon its receiving it. However, as many of the clients found out as soon as the money id paid to the broker he will shortly after cancel the policy and retain all of the clients’ money as well as receive a refund from the insurance company.

Therefore, a word of advice for all you eager to drive petrol heads – if it sounds too good to be true, then it probably is!

Sharp Price Fall in UK Car Insurance

UK car insurance has seen the sharpest decline in prices in the past 20 years following the release of figures which show prices to be on average 12.4% cheaper over the course of last year. The most recent index which reveals any alterations in motor insurance premiums on a three month basis, compiled by the AA British Insurance Premium Index, has revealed a price drop from £648.61 (September 2012) to £568.32 (September 2013) on a yearly comprehensive car insurance cover. This annual change is the largest on record since the Index last recorded a major premium drop in 1994.

1The figures come at a good time and prior to Chris Grayling, the Justice Minister, announcing his proposed plan to tackle fraudulent whiplash injury claims which play a significant role in driving up annual insurance premiums for the truthful motorists on UK roads. The biggest fall in annual premiums which was a 15.5% decrease down to £707 was that for younger motorists in the age group 23-29. However, those aged 17-22 only benefited from an annual fall of 4.6% with drivers aged over 70 also not seeing a massive change in their premiums with only a 4.8% decrease.

Moreover, news from Europe by way of a gender ruling by the European Court of Justice has meant that women drivers have not seen as great a benefit as male drivers as the institution pushed to achieve greater equality in insurance premiums. In its ruling the Court maintained a stance that insurance companies must maintain gender neutrality when issuing quotes and premiums, meaning the prices for women drivers has as a result increased, thus women no longer being able to benefit from the ‘safer drivers’ stereotype in comparison to men.

When comparing the statistics by region it becomes evident that Scottish drivers have benefited the most with their premiums falling by 5.5% right down to an annual £424.04 in the previous quarter. It thus continues to be the cheapest location for car insurance within the United Kingdom. The region with the least amount of price reduction was that of East Anglia which only had a fall of 1.4%. Furthermore, cover for third party, fire and theft also recorded a decrease however, remained by large more expensive than that for comprehensive cover. The average fall for this type of insurance was 6.4%. The director of AA Insurance, Simon Douglas, in a statement commented on the competitiveness of the car market by saying that it has become more intense.

4 Tips That’ll Lower You Home Insurance

1. Ensure that you aren’t over-insured.

While being under-insured can be a complication when disaster strikes, being over-insured would mean you’re wasting your hard-earned money.The ideal situation would be to have just the right amount of insurance coverage. And we’ll tell you how to do just that.

When it’s time for renewal each year, review your policy closely. Specifically, keep a close eye on any floaters, which are extra insurance for items not fully covered in a standard homeowner’s policy. Examples would be items like expensive electronics, jewelry and artwork. If it so happens, that you no longer own the item or if its value has lowered, be sure to cancel or reduce the floater.

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2. Ensure your deductible is appropriate.

A deductible is defined as the amount of money you have to pay before your insurance policy is triggered and pays the claim. The lower your deductible, the higher your insurance premium will be. According to the Insurance Information Institute (III), most insurance companies today recommend a deductible of $500 or more. However, if you are able to afford raising your deductible to $1,000, you could save as much as 25 percent. And don’t forget that you might have more than one kind of deductible. For example, if you live in a disaster-prone area, like one prone to windstorms, hail or earthquakes, the insurance company may have added a separate deductible for those specific types of damage, into your insurance policy.

3. Ensure that you have the best deal every year.

You have to shop around if you want to make sure you’re getting a great rate. You could ask your network for recommendations, and check out the internet sources and comparison sites there for help finding the best insurer for you. Pay attention to consumer complaint info, as price isn’t the only thing you want to consider when deciding on an insurer. Another option would for you to look for an independent insurance agent, who shops around for you.

4. Ensure to consolidate to save even more.

There are various companies that sell multiple types of insurance, such as homeowners, auto and liabilities. If you buy two or more policies from them, they will knock a percentage off your premium. It can save you anywhere from 5 to 15 percent, according to experts in the insurance field. Just make sure that the combined price with a discount is lower than buying separate policies from different insurance firms.

Insurance giant Swinton fined £7.4m for mis selling insurance

One of the UK’s largest insurers, Swinton Group Plc, has been fined for an insurance scandal reminiscent of PPI claims and Libor rate fixing. The new Financial Conduct Authority (FCA, the successor to the now defunct FSA) has fined Swinton a record £7.4m for mis-selling insurance ‘add ons’. Additionally, all customers affected will be compensated, at a cost of over £11m.

According to the FCA, between April 2012 and April 2012, Swinton Insurance had sold insurance policies (covering home, personal and motor breakdown) without fully informing customers of all of the terms and conditions. Many customers had been sold insurance ‘add ons’ to their policies, often without those being fully explained, or being informed that such  ‘add ons’ were optional. A aggressive, target driven sales culture was unearthed, that had also not properly monitored such sales calls.  The problems emerged after a new Chief Executive was appointed in 2011. Christophe Bardet conducted a review of the insurer- and consequently reported Swinton to the new regulator.

Swinton has already set aside  £11.2m in compensation, and has been contacting affected customers. In 2012, it contacted over 650,000 customers, and has already paid out  £1.9m. The ‘add on’ scandal came after Swinton had been fined £770,000 in 2009, and ordered to refund 350,000 customers over mis sold PPI. Moreover, the insurer took part in an FCA study earlier this year as to the best way to draft compensation letters- and had agreed to settle.Taking Swinton’s cooperation into account, the FCA reduced the fine by almost a third.

According to a blunt statement by FCA enforcement chief Tracey McDermott “Swinton failed its customers… When selling monthly add-on policies, Swinton did not place the customer at the heart of its business. Instead it prioritised profit…  [The outcome] shows our approach in action and will act as a deterrent for other firms tempted to put profit figures above the fair treatment of customers.”

In response to the ruling, Swinton “acknowledges the shortcomings in its sales practices during this period, and the company unreservedly apologises to customers”.

The case comes amidst an (unconnected) FCA review into the insurance sector. FCA chief Martin Wheatley recently announced a sweeping review into ‘add on’ insurance policies. In addition to insurance companies, such polices sold by train companies, airlines, and electrical goods retailers that are  alongside their products or services will be examined. The concern here is that such policies are once again more concerned with profit than being in the best consumer interest.

Although the FCA has only been around since April 1st of this year, it has certainly made its mark already. This ruling only goes to show further that the FCA means business, and is determined to bring the financial services sector to account, and to ensure that consumers get fair treatment- very welcome after after several years of banking excesses and scandals.