The Financial Services Authority (FSA) has been investigating the way Payment Protection Insurance is being sold by loan providers which include some of the UK's biggest banks and building societies. And it's big business. Sales of PPI as it's called, earn lenders more than £1billion a year.
PPI is designed to protect borrowers by paying monthly loan repayment in the event that the borrower becomes unemployed or unable to work though accident or illness. Many lenders sell the insurance alongside the loan with around 50% of customers agreeing to the insurance.
However, according to the Department of Trade & Industry, only 4% claim and of these claims 25% are rejected. This may be partially explained by the FSA's investigation which found that around half of the lenders surveyed failed to explain the details and exclusions to customers or make sure the insurance was suitable for the clients. Whilst the investigation reportedly does not find that lenders are compulsorily selling the insurance, it was frequently automatically added to loan quotations without it being disclosed that the insurance was, in fact, optional.
Even worse, some lenders are failing to point out to borrowers that the cost of the insurance for the full period of the loan, was being added as a lump sum at the outset rather than being paid as a monthly premium. This means that the borrower cannot cancel the insurance without redeeming the entire loan and renegotiating a new loan.
extra $$$
Tuesday, January 19, 2010
Get Moving Insurance before Moving
There are different kinds of Insurance that pertain to moving:
Released Value Insurance, the most basic coverage provided by moving companies. Estimated by weight it covers US$0.60 per pound of objects.
Declared Value Insurance offers coverage of US $ 1.25 per pound, coverage is on the total weight of your movables. If any objects are damaged, the insurance is based on the depreciated value of the object to the maximum value of items shipped.
Lump Sum Value, this insures based on the actual value of goods shipped and not by weight. The specific value of items must be declared on the bill of landing.
Full Value Protection, covers all damage or losses. Objects will be replaced, repaired, or cash for value of object will be offered.
Tips:
Decide which objects are to be moved and which are to be stored.
Prepare a detailed list of objects to be moved along with weight and value.
It is advisable to take insurance over and above that offered by the movers.
Ask for advice on which insurance would benefit you the most.
Get estimates from insurers.
Remember a customer has to file a complaint within nine months of the move.
A mover is legally obliged to acknowledge a claim within 30 days and offer settlement within 120 days.
Even if there is damage a customer is obligated by law to pay for the move. After which the customer should address the claim procedure to receive compensation.
Ask the mover to explain clearly the insurance cover offered by them, the exclusions, and limits.
Always read carefully the small print on the mover's contract and insurance papers.
List antiques and valuables separately and take extra coverage for them. Extra premium is generally charged for fine china, paintings, and so on.
If any goods are damaged, never unpack/remove them from their boxes until all procedures for claims are completed.
Check whether your homeowners insurance covers moving. Purchase an insurance that best covers the value of the property being transported.
Find out what can be insured. Normally, jewellery, cash, as well as items not packed by movers are not covered. Goods like fuels, fertilizers, acids, ammunitions, paints, aerosol cans, corrosives, as well as flammable substances will invalidate insurance and should not be moved.
It is important to know the laws of the state or country where you live and the place you are moving to.
Experts recommend transit insurance as a good supplement to moving insurance. It will generally cover the gaps left by the insurance policy.
Clever coverage can save hundreds of thousands of dollars and insurance is available on the net, through the mover, a move-it-yourself company, or homeowner's insurance companies
Released Value Insurance, the most basic coverage provided by moving companies. Estimated by weight it covers US$0.60 per pound of objects.
Declared Value Insurance offers coverage of US $ 1.25 per pound, coverage is on the total weight of your movables. If any objects are damaged, the insurance is based on the depreciated value of the object to the maximum value of items shipped.
Lump Sum Value, this insures based on the actual value of goods shipped and not by weight. The specific value of items must be declared on the bill of landing.
Full Value Protection, covers all damage or losses. Objects will be replaced, repaired, or cash for value of object will be offered.
Tips:
Decide which objects are to be moved and which are to be stored.
Prepare a detailed list of objects to be moved along with weight and value.
It is advisable to take insurance over and above that offered by the movers.
Ask for advice on which insurance would benefit you the most.
Get estimates from insurers.
Remember a customer has to file a complaint within nine months of the move.
A mover is legally obliged to acknowledge a claim within 30 days and offer settlement within 120 days.
Even if there is damage a customer is obligated by law to pay for the move. After which the customer should address the claim procedure to receive compensation.
Ask the mover to explain clearly the insurance cover offered by them, the exclusions, and limits.
Always read carefully the small print on the mover's contract and insurance papers.
List antiques and valuables separately and take extra coverage for them. Extra premium is generally charged for fine china, paintings, and so on.
If any goods are damaged, never unpack/remove them from their boxes until all procedures for claims are completed.
Check whether your homeowners insurance covers moving. Purchase an insurance that best covers the value of the property being transported.
Find out what can be insured. Normally, jewellery, cash, as well as items not packed by movers are not covered. Goods like fuels, fertilizers, acids, ammunitions, paints, aerosol cans, corrosives, as well as flammable substances will invalidate insurance and should not be moved.
It is important to know the laws of the state or country where you live and the place you are moving to.
Experts recommend transit insurance as a good supplement to moving insurance. It will generally cover the gaps left by the insurance policy.
Clever coverage can save hundreds of thousands of dollars and insurance is available on the net, through the mover, a move-it-yourself company, or homeowner's insurance companies
Data Management in Insurance Industry
Data is all pervasive.It begins much earlier than the initial stages of client understanding and diligence, and extends far beyond helping revenue generation, encompassing cross and up-selling products or services. It also helps to understand the business risks and verify whether the regulatory compliance needs are met. The insurance industry depends on promises made on paper, which are eventually converted into supporting databases and document repositories. This article elaborates on the types of data, modes of data acquisition, data checks and usage, and the prevalent techniques for data management.
Data sources
Insurance industry's data can broadly be classified as employee-related, distribution-related, customer-related, product-related, operations- related and accounting-related. Of these categories, employee-related data is required purely for internal workforce operations management and the rest have a direct impact on the cost and revenue of the insurance company.
All data is collected and stored in databases, data warehouses and as documents or images.
Data sources
Insurance industry's data can broadly be classified as employee-related, distribution-related, customer-related, product-related, operations- related and accounting-related. Of these categories, employee-related data is required purely for internal workforce operations management and the rest have a direct impact on the cost and revenue of the insurance company.
All data is collected and stored in databases, data warehouses and as documents or images.
Thursday, January 14, 2010
Car Insurance - How can you lower your premiums?
Many factors influence the premium for your Motor insurance policy. Your insurer will have asked you many questions whilst producing your quote - some of which will affect your premium and some will not. Below we discuss the key variables that are within the policyholder's control.
Consolidating policies
By insuring a number of vehicles with the same insurer, or by trying to take out home and life insurance through your car insurer, you may be able to secure a 'bulk buy' discount.
Location
A big influence on the cost of your car insurance is where you live. The chance of your car being broken into or stolen is a key concern for the insurer. More urban areas traditionally facing greater risk of theft and therefore tend to be more expensive than countryside locations.
Excess
By agreeing to pay a greater excess on each claim you can reduce your car insurance premiums. This is because you are reducing the liability of the insurer and therefore in return they are able to offer you a lower premium.
Your Vehicle
The cheaper and slower your vehicle the lower your premiums are likely to be. If you are looking to buy a new vehicle make sure you fully consider the cost of insurance - you may be able to buy the car but can you afford to run it?
Mileage
You can control your insurance premiums by restricting your annual mileage. However, be aware that if you exceed the restricted number of miles you'll then become uninsured!
Parking
Where you park your vehicle overnight is also very important to the insurers. If it is kept in a locked garage, you should be offered a lower premium than if you leave it unattended in the street.
Security
Security devices that prevent or hinder theft may also reduce your premium. Common examples include alarms and immobilisers, however, be aware that as we improve the quality of our security devices the thieves just become better at bypassing them.
No Claims Discount
Save up your no claims discount by avoiding making small claims upon your policy. After a set number of years, 4 or 5 typically, you'll often be offered the option to pay an additional small premium to protect your no claims bonus. This can prove very helpful if you subsequently end up having an accident.
Advanced driving skills
By taking an advanced driving course you may also be able to reduce your premiums. The Institute for Advanced Motorists and the Royal Society for Prevention of Accidents each offer membership which provides you with discounts for both the cost of driving courses and your car insurance premiums.
Two key variables NOT within the policyholder's control.
Your Sex
Women are statistically less likely to have an accident and, if they do, it's less likely to be serious. Because of these statistics women benefit from lower premiums. It is also worth noting that if you represent one half of a couple you should consider having the female as the primary driver with the male as the second driver.
Your Age
The older you are, the less likely you are to make a claim. As a result insurance companies charge lower premiums for more mature drivers.
Consolidating policies
By insuring a number of vehicles with the same insurer, or by trying to take out home and life insurance through your car insurer, you may be able to secure a 'bulk buy' discount.
Location
A big influence on the cost of your car insurance is where you live. The chance of your car being broken into or stolen is a key concern for the insurer. More urban areas traditionally facing greater risk of theft and therefore tend to be more expensive than countryside locations.
Excess
By agreeing to pay a greater excess on each claim you can reduce your car insurance premiums. This is because you are reducing the liability of the insurer and therefore in return they are able to offer you a lower premium.
Your Vehicle
The cheaper and slower your vehicle the lower your premiums are likely to be. If you are looking to buy a new vehicle make sure you fully consider the cost of insurance - you may be able to buy the car but can you afford to run it?
Mileage
You can control your insurance premiums by restricting your annual mileage. However, be aware that if you exceed the restricted number of miles you'll then become uninsured!
Parking
Where you park your vehicle overnight is also very important to the insurers. If it is kept in a locked garage, you should be offered a lower premium than if you leave it unattended in the street.
Security
Security devices that prevent or hinder theft may also reduce your premium. Common examples include alarms and immobilisers, however, be aware that as we improve the quality of our security devices the thieves just become better at bypassing them.
No Claims Discount
Save up your no claims discount by avoiding making small claims upon your policy. After a set number of years, 4 or 5 typically, you'll often be offered the option to pay an additional small premium to protect your no claims bonus. This can prove very helpful if you subsequently end up having an accident.
Advanced driving skills
By taking an advanced driving course you may also be able to reduce your premiums. The Institute for Advanced Motorists and the Royal Society for Prevention of Accidents each offer membership which provides you with discounts for both the cost of driving courses and your car insurance premiums.
Two key variables NOT within the policyholder's control.
Your Sex
Women are statistically less likely to have an accident and, if they do, it's less likely to be serious. Because of these statistics women benefit from lower premiums. It is also worth noting that if you represent one half of a couple you should consider having the female as the primary driver with the male as the second driver.
Your Age
The older you are, the less likely you are to make a claim. As a result insurance companies charge lower premiums for more mature drivers.
5 Steps to Cheaper Home Owners Insurance
Knowledge is power
When you are looking to make any major purchase or take out any long term insurance the first thing you should do is arm yourself with all the facts you need and this is by no means any different with your home owners insurance. Work out the value of your home and write up a list of the personal items in your home. This list should include absolutely everything that you would need to replace in the event of it being damaged beyond repair, stolen or broken. This itinerary will not only prove useful for calculating the level of cover you require but also for making a claim should the need arise.
Calculating your cover
Home owners insurance is a little different to other insurance. Car insurance uses book value of your car, the insurance company being safe in the knowledge that you will be able to replace your car should the unthinkable happen. Going out and buying a house is a little ! different to this. There isn't a set value on a house and you can't just buy the house itself. In order to come up with a value on your home you need to find out the market value for similar houses in a similar area. In order to reduce the cost of your monthly premium you should seriously consider excluding a small amount of the money because while you need to insure the building and outbuildings you don't to insure the surrounding or housing land.
Shopping around
This is the key aspect to gaining cheaper home owners insurance and is a step that has been made much easier with the introduction of the Internet. Comparison sites are regularly available that will allow you to get quotes from a large number of home owners insurance companies. This will give you a much better picture of the type of price you should expect to be paying and will let you decide which policy has the best cover combined with the cheapest price.
Selecting your home owners insurance policy
Once you've got your list of quotes in you should be able to tell pretty quickly which of the offers appears the best. Check it over to make sure it offers exactly what you are looking for and if it does you are onto a winner. If there are a couple of quotes around the same price look them all over to see if any have outstanding extra services that may make you give them slight preference over the others.
Renewal time
You will need to renew your policy or change insurance provider on an annual basis and when this time comes you should check that the policy you are applying for still has everything you need. By doing this you will be able to stay on top of the prices you are paying and the coverage you are receiving.
When you are looking to make any major purchase or take out any long term insurance the first thing you should do is arm yourself with all the facts you need and this is by no means any different with your home owners insurance. Work out the value of your home and write up a list of the personal items in your home. This list should include absolutely everything that you would need to replace in the event of it being damaged beyond repair, stolen or broken. This itinerary will not only prove useful for calculating the level of cover you require but also for making a claim should the need arise.
Calculating your cover
Home owners insurance is a little different to other insurance. Car insurance uses book value of your car, the insurance company being safe in the knowledge that you will be able to replace your car should the unthinkable happen. Going out and buying a house is a little ! different to this. There isn't a set value on a house and you can't just buy the house itself. In order to come up with a value on your home you need to find out the market value for similar houses in a similar area. In order to reduce the cost of your monthly premium you should seriously consider excluding a small amount of the money because while you need to insure the building and outbuildings you don't to insure the surrounding or housing land.
Shopping around
This is the key aspect to gaining cheaper home owners insurance and is a step that has been made much easier with the introduction of the Internet. Comparison sites are regularly available that will allow you to get quotes from a large number of home owners insurance companies. This will give you a much better picture of the type of price you should expect to be paying and will let you decide which policy has the best cover combined with the cheapest price.
Selecting your home owners insurance policy
Once you've got your list of quotes in you should be able to tell pretty quickly which of the offers appears the best. Check it over to make sure it offers exactly what you are looking for and if it does you are onto a winner. If there are a couple of quotes around the same price look them all over to see if any have outstanding extra services that may make you give them slight preference over the others.
Renewal time
You will need to renew your policy or change insurance provider on an annual basis and when this time comes you should check that the policy you are applying for still has everything you need. By doing this you will be able to stay on top of the prices you are paying and the coverage you are receiving.
Life Insurance - Money Saving Top Tips
Despite the underlying simplicity of life insurance, most web sites channel their online clients through a telephone based help and advice service manned by experienced personnel. They represent your safety net so if a little technical knowledge is called for, help is at hand. But it's always a good idea to have a few Top Tips in your back pocket when you're shopping online for life insurance. They'll help you ask the right questions and find the best policy. 1. Always have your Life Insurance policy "Written in Trust". This means that in the event of a claim, the money goes directly and immediately to the person(s) you nominate when you first take the policy out. It also avoids all possibility of your estate having to pay Inheritance Tax on the proceeds of your policy and that could represent a 40% tax saving ! All you have to do is tell the online brokerage organising your policy that you want your policy "Written in Trust" and the names of the people who the life insurance company pay in the event of a claim. They will then sort it all out for you. The extra good news is that this service is invariably free of charge. So it's a win win situation and there aren't many of those around these days ! 2. In the early years a Reviewable Life Insurance Policy will be cheaper but a Guaranteed Policy will work out a better buy in the longer term. With a "Guaranteed Policy" the insurance company guarantees never to increase your policy's premium. With a "Reviewable Policy" you agree that your insurance company can review the cost of your policy at regular intervals. But don't be kidded - in our experience a "review" is just another word for a price increase. After all, who's ever heard of an insurance company passing up a chance to charge you more! The review intervals are usually between 2 to 5 years but this does vary between insurance companies. You will find the details of the review intervals on the documents sent to you before you accept the insurance - these are called The Key Features Documents. So, comparing otherwise like for like policies, in the early years the premiums for a "Reviewable Policy" will undoubtedly be lower than the premiums for a "Guaranteed Policy". Thereafter, the premiums for a Reviewable Policy increase eventually catching up with and overtaking, the premium for a "Guaranteed Policy". In our experience, you can expect the monthly premiums for a Reviewable Policy to exceed those of a Guaranteed policy in about 7 to 10 years and then within the following 10 years, more than double again. If your budget is currently tight then by all means choose a Reviewable Policy - after all your salary may increase in coming years and ease the strain. On the other hand, if the premiums for a Guaranteed Policy are affordable, we think they represent your best buy. A footnote. Many insurance companies have stopped offering "Guaranteed" rates for standalone critical illness insurance policies. This because they have experienced much higher claim rates than they initially expected. However, you may still find a Guaranteed life insurance policy that also provides critical illness cover. As we have explained, "Guaranteed" rates are especially good value and if you can get a quote for a Guaranteed life policy that includes critical illness cover, you may have a real bargain. 3. Thinking about a Joint Life Insurance Policy? A Joint Life Insurance policy is usually written on a first death basis. This means that the policy will pay out on the death of the first policyholder, subject to the policy being in force at the time. This leaves the second person uninsured and older. Older people can struggle to get life insurance at an affordable premium, so rather than a Joint Policy consider taking out separate policies now. Overall it will work out a little dearer - but you get twice the cover and double the peace of mind. 4. Taking out a Life Insurance Policy? Now would be an ideal time to include Critical Illness cover. Are you likely to need Critical Illness Insurance in the future? Yes? Then consider adding it now to the life insurance policy you're arranging. Why? There are three reasons. Firstly, a Life Insurance policy combined with Critical Illness cover will work out significantly cheaper than buying two separate policies. Secondly, as we have already explained in the footnote to Tip 2, you may be able to buy a combined Life and Critical Illness policy with a guaranteed premium. That could be a real bargain. Finally, premiums for critical illness cover increase rapidly as you get older - so the sooner you take it out, the cheaper it will be. 5. Don't confuse Terminal Illness cover with Critical Illness cover. There's world of difference between Terminal Illness and Critical Illness cover so it's important to understand the difference.
Memo to Myself - I Need Keyman Insurance
Sales down, profits down, bank phoning all too politely to ask about the Directors guarantee on the overdraft. Then I'd have to try and buy his shares. I wouldn't want someone else to get hold of those. At some stage I'd have to recruit someone of his calibre to continue the company going forward - that wouldn't be easy! And recruiting top people doesn't come cheap. That's more time and more money. The personal problems... the repercussions... the extra work... the extra stress... Oh heck, I don't want to think about it all. Quickly, switch over to Radio 1. Does all this ring alarm bells with you? 95.2% of UK businesses employ less than 10 people and these are precisely the organisations most at risk from the impact of severe illness or death of a key person. The risks of a key person being stuck down with a long term illness or death are real. 1 in 5 men suffer a critical illness before their normal retirement age. Then there's the M1. The fact that it hasn't happened so far might just mean your business has just been lucky. Now to those actuarial boffins in insurance companies, risk and luck are flip sides of the same coin. And they can provide insurance cover for most risks. After all they too want to increase sales. But they're scratching their heads about Keyman Insurance. Most of Britain's 4.1million small businesses should have it but few do. What can it do? It can be structured to:
Provide an income stream to the company whilst the key person is incapacitated (compensation for the lost contribution from the Keyman)
Provide a lump sum to the business in the event of death (pay off the overdraft or simply bolster cash flow?)
Provide money for remaining shareholders to buy the shares from the original shareholder or their estate
You'll need to talk to a Financial Adviser about these issues but they are all insurable. Can your business afford to take a risk it doesn't need to? Memo to myself - get Keyman Insurance!
Provide an income stream to the company whilst the key person is incapacitated (compensation for the lost contribution from the Keyman)
Provide a lump sum to the business in the event of death (pay off the overdraft or simply bolster cash flow?)
Provide money for remaining shareholders to buy the shares from the original shareholder or their estate
You'll need to talk to a Financial Adviser about these issues but they are all insurable. Can your business afford to take a risk it doesn't need to? Memo to myself - get Keyman Insurance!
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