Victims of Recent Downpours Facing Spiralling Excesses

Reports in both the Guardian and on the BBC News website are highlighting the rising costs of insurance premiums for those that have been hit hard by the recent flooding in areas such as Cumbria.

The North West County has been amongst numerous places across the United Kingdom to suffer at the hands of intense flooding and insurance providers have used it as a reason to express the need for adequate cover in such conditions.

However, despite home owners carrying out various tasks to protect their home, as well as doing their best to minimise the damage by moving possessions to higher levels, insurance companies are cited to be rarely helping them.

As a result, despite their best efforts, there are homes that are becoming virtually worthless and impossible to sell on because of the insurance excesses caused by flooding.

As a result the National Flood Forum, a charity that provides advice and support to people who are victims of flooding, is urging insurance companies to change its attitude towards flood victims and protection measures that are in place.

They feel that it is unfair that despite work to protect the home, some of which can stretch into tens of thousands of pounds, high insurance premiums and excesses are still being applied to properties.

The Guardian newspaper has spoken to various people that have succumbed to flooding, citing insurance figures that have more than doubled since 2008. They refer to AXA, who have since imposed a maximum limit for flood excesses of £10,000.

The insurance industry has insisted that they do not increase the flood excess on the majority of properties. A press release from MoneySupermarket.com earlier in November pointed out that insurance providers have improved their handling of flooding in recent years and home owners should still ensure they are taking preventative measures to minimise damage.

Earlier in the month, the BBC also pointed out that the government and the insurance industry had agreed that the providers would continue to insure homes that are at risk of flooding, with the real difficulty being the switch to another provider in the future.

Sources: Guardian.co.uk, BBC News and MoneySupermarket.com Press Release

Many People Being Ripped Off on Home Insurance

In the modern world it is easier than ever to find the best deals in insurance, with comparison websites and an abundance of other assets at our disposal helping us to secure a policy that suits our needs.

However, according to a recent article in the Guardian, too many people are still being ripped off on their home insurance, with a large number of homeowners failing to shop around for the best deal.

It is a message that is often found in the appendices for numerous press releases issued by leading insurance providers – homeowners should shop around to ensure that they do not have to pay more than they need to. Doing so can also mean the difference between landing an inadequate insurance policy and one that covers all of the necessary bases.

The newspaper refers to a Leicester teacher who is urging people with older relatives to take steps to ensure they are not being charged more than they need to by insurance companies. In a world where many of our financial transactions are carried out over the internet, the elderly could be particularly vulnerable to being ripped off.

So whether you are finding an insurance policy for the first time or aiming to renew your insurance after the old one expired, shopping around is vital to ensure you are not paying more than you should. People have been known to save excessive amounts of money by changing to a new provider after sticking with their original insurer for many years previously.

The Guardian reports on a particular elderly man who had stuck with a particular home insurance provider for nearly 60 years and it was only when a relative intervened that they made changes. Not only did they subsequently find a policy that would save them money, they also found that the details of the original policy were inadequate, so he was being overcharged for an inferior service.

The story echoes a recent press release from Sainsbury’s Finance, which urged people not to purposely downgrade their home insurance in light of the recession. With some people failing to shop around and others dampening the ones they already have, it points to a number of people in the UK who do not have adequate home insurance.

Source: Guardian.co.uk 27^th Nov 2009

Reports on the Weather Issues Facing the UK

Each year the UK faces extreme weather conditions that often lead to flooding and gale force winds and as Cumbria struggles to get back to its feet following the horrendous flooding it has seen over the last couple of weeks, MoneySupermaket.com and the BBC refer to insurance premiums during this time.

Flooding can cause considerable damage to the home; this much is a given, but both sources give indications as to the habits of insurers and those who have suffered at the hands of flooding and other weather-related damage.

In light of the recent floods in Cumbria, Dumfries and Galloway, Julie Owens of MoneySupermarket.com highlights the need for Home Insurance: “Unfortunately this sort of event serves as a reminder to those living in flood risk areas to make sure they are prepared for these eventualities and making sure they are fully insured is paramount.

“People living in ‘at risk’ areas should check the details of what their buildings and contents policies cover, as well as the limits and excesses on both. It pays to make sure that the quality of your insurance is high and you won’t be left out of pocket if you have to make a claim.”

She highlights that in recent years, insurance providers have improved the way in which they handle large scale flooding incidents like this. However, home owners, who may have to make claims on both contents and building insurance, should take extra steps to minimise damage, such as moving valuables upstairs and tying down garden appliances that could cause damage to the house.

“Your insurer will expect you to make attempts to minimise your claim”, she adds.

The BBC refers to a deal that was agreed upon between the government and the insurance industry that means that insurers will continue to insure homes at risk of flood. However, the real difficulty in this situation may be switching to a new insurance provider.

The average costs of flood damage to the home each year amounts from £20,000 to £40,000 according to the ABI, with these figures expected to rise with global temperatures. In the current situation in Cumbria, Dumfries and Galloway, the claims could exceed £100 million in total.

Source: MoneySupermarket.com Press Release Nov 2009 and BBC News

Different Sources Cite Difference Changes

The RAC, in a new press release, has announced that the cost of motoring for British drivers has fallen by 5% in 2009, with an average reduction of £123. However, according to Sainsbury’s Finance, this is not so.

According to Sainsbury’s Car Insurance, the average annual cost of running a car has increased by 2.68% when compared to the year before, with the figures rising to 11% when compared to 2007.

The leading insurance provider says that the most noticeable cost increase has arisen due to car insurance. This is an area that the RAC and Sainsbury’s can at least agree on, with the RAC seeing an average rise of £385 in 2008 to £409 in 2009. This compares to figures from Sainsbury’s which estimates the average annual cost of car insurance per motorist has risen from £488.48 in 2008 to £551.74 in 2009. The Sainsbury’s figures amount to an increase of 13% compared to 2008 and when compared to 2007, it demonstrates an increase of 23%.

Whatever the situation, the RAC cites various changes in the habits of those running cars in their day to day lives, such as the return to the one car family and downsizing the size of the vehicle (with the RAC citing more women doing this than men).

 2009 did see a decrease in fuel costs despite rises and falls all year round and the RAC cites figures that claim a fall of 10% in the last 12 months, a fall to £1,184 for the motorist per year, whilst diesel has fallen by 14%.

Sainsbury’s Finance comments on their figures, with Ben Tyte saying “While certain costs of running a car have fallen during the past year, compared to 2007, the cost of motoring has still increased fairly significantly with road taxes and insurance premiums both on the rise. The cost of driving a car can be kept better in check by shopping around, particularly for car insurance and servicing.”

The RAC, whilst clearly disagreeing over the news that the costs have risen, points to motorists still feeling financial pressure and acting accordingly, with Adrian Tink pointing out: “We’re seeing motorists really question how they use their cars. The trend towards the one car family shows how people are prepared to make fundemental lifestyle changes for the benefit of themselves, their families and their pockets.”

Sources: RAC Press Release and Sainsbury’s Finance Press Release Nov 2009

Only a 2.6% Rise Since 2007

Home owners going without home insurance to cut the costs of everyday life could breathe a sigh of relief this year as Sainsbury’s Finance releases figures showing only a small rise in the cost of running the average house since 2007.

The cost of running the household can hit unwanted highs and coupled with the ongoing recession it has meant that some people are cutting back on items such as home insurance. However, industry figures warn that such action could end up costing people more in the long run.

Sainsbury’s Home Insurance reveals that the average cost of running the home is around £11,455 annually according to sources such as the Office of National Statistics. This is around £220 a week and a rise of only 2.60% since 2007. Sainsbury’s cites the reduction of mortgage payments as the reason for the lower rise as other areas of the house have actually risen in costs.

One area that has risen is the cost of gas bills in the UK, which have risen on average by around 26.68% since 2007 from £651 to £812 (estimated), with electricity at £14.69%. This is according to figures from Ofgem.

So home owners should think twice about cancelling or failing to take out insurance policies, with a range of risks still facing the average home. Sainsbury’s has recently highlighted the reduction of home insurance claims in 2009, which compared against the increase in burglaries suggests a reduction in the number of people with home insurance. The insurer estimates that 946,000 people have cancelled or reduced their home insurance cover from 2008 to 2009, with 700,000 citing their financial situation.

“We spend thousands of pounds each year running our homes and have often invested even more money on furnishings and decorating,” said Joanne Mallon, Home Insurance Manager for Sainsbury’s Finance, “Yet, so many people are putting this investment at risk by cutting back on their home insurance.

“Good quality home insurance doesn’t have to be expensive.”

As ever, customers are encouraged to shop around for the best deal they can find in home insurance (as is the case with any form of insurance). It could make the difference between no insurance and finding a policy at the right price and an adequate level of protection.

Source: Sainsbury’s Finance Press Release July 2009

Offering Accidental Death Cover

It’s not uncommon to put thoughts of life insurance aside and think about happier things. After all, who wants to think about their own death or the demise of someone close to them? However, life insurance is something that can provide for loved ones after one’s untimely passing, making it highly necessary in a range of circumstances.

But insurance providers are regularly concerned by the low numbers of people that have cover in the event of their death, with companies such as LV= recently citing that more people have pet insurance than life insurance.

Their study, which was carried out as part of the “Look After What You Love Index”, highlighted that 4% of people questioned did not have life insurance, which is out of sync with the thoughts of most people who wish to ensure their families are well protected during the credit crunch.

Now Direct Line is offering their hand in easing the problem, by offering £15,000 of free accidental death cover for a single year, providing they seek a quote over the phone.

Whilst life insurance is something someone might not want to think about, they urge people to take steps to give them peace of mind should anything go wrong.

Direct Line offers two forms of life insurance – Fixed Term Life Cover and Mortgage Life Cover, both of which feature a £30,000 sum assured for those that die under the age of 40, dropping to a minimum sum assurance of £20,000 over the age of 40.

“There really is no time like the present for people to be considering their options when it comes to life insurance,” says Paul Cowman of Direct Line, “To some, life insurance seems like an unnecessary expense. But if you have people who depend on you and your income, you need it.”

He also points out that any financial plan should include life insurance, with it making up an important part of the family’s financial future. It means that if something was to happen then at the very least there will be no money issues to worry about.

During the economic crisis it is not uncommon for people to cut back on certain expenses, including insurance, so time will tell if more people start taking out life insurance policies.

Sources: Easier.com and MyFinances.co.uk

According To Figures Obtained by Sainsbury’s Home Insurance Claims Index

People regularly fear for their belongings and if we are to believe the news, there are crimes going on regularly in the UK, with the contents in our homes under threat.

However, according the Sainsbury’s Finance, there has in fact been a drop in the amount of claims on people’s home insurance in 2009, whilst the average size of each claim also fell.

Sainsbury’s Home Insurance recently launched their Home Insurance Claims Index, which is designed the monitor the amount of claims made during intervals of six months, whilst also looking at their individual size.

In the first half of 2008 there was a worrying statistic made aware to the leading insurance provider that showed 527,000 claims were made in the first half of the year. However, by the time the same period finished in 2009, this had dropped to 373,000, with the average volume that made up each claim showing a drop from £918 to £735.

The figures represented the number of claims issued to Sainsbury’s Home Insurance and clearly do not account for the amount of claims made to other leading insurance providers. However, any form of drop in the amount of home insurance claims is something to be happy about, though home owners should still be vigilant.

During both 2008 and 2009 the most popular form of claim was water escaping, followed by storm damage, accounting for around 18% and 16% in 2008 respectively. This changed to 19% and 18% respectively in 2009. The top 5 claims during both periods also included accidental damage to the building, theft from the property and accidental damage to possessions such as TV’s, Videos and Computers.

“Our index shows the huge impact adverse weather conditions can have on the number and value of home insurance claims made,” said Lucy Hunter of Sainsbury’s Home Insurance.

“The first quarter of 2008 brought particularly severe conditions, and storm damage in that quarter accounted for 21.8% of all claims made.

“For the six months overall, storm damage was still the second most prevalent claim in 2008, accounting for 15.9% of claims made. In the first half of 2009 it only accounted for 8.5% of claims.”

Pet Insurance Can Help Cover Costs And Make Life Easier

It is regularly reported that pet insurance can cover the costs of veterinary treatment and that this can make life easier for the pet owner.

In fact, having pet insurance can make all of the difference in some cases, with daunting veterinary costs arising if the owner is not covered in case of an emergency or unforeseen circumstances.

MoneySupermarket.com points to figures released by the RSPCA to back up long held claims of pet insurance meaning life or death for pets in certain situations, drawing attention to results showing a rise in abandoned pets in 2008.

It cites owners struggling to cover the costs associated with veterinary bills as well as food costs which can cause pet owners to abandoning their pets, allowing them to spend money elsewhere.

However, it is not just the RSPCA and MoneySupermarket that are drawing attention to such claims. In December 2008 it was reported by the Times that the financial crisis was leading to an increase in stray dogs as pet owners struggled to make ends meet.

Prior to Christmas it claimed that Battersea Dogs and Cats Home was nearing full capacity for the first time in its history. It seemed that as budgets began to tighten, the most costly features of the household were first to be abandoned. This is now backed up by RSPCA results showing that a 57% rise in abandonment of pets took place in 2008 from the year before.

The Times argued that by taking out pet insurance policies, pet owners would not necessarily be faced with an inability to pay for unexpected veterinary bills.

The recent RSPCA results show that half of pets in the United Kingdom will be faced with veterinary treatment at some point in 2009 and as vets’ costs rise this is becoming worrisome. But not all pet insurance policies are out of people’s price ranges, so by shopping around and finding a policy that not only meets the needs, but also covers the areas required, pet owners will avoid certain unnecessary situations.

Pet insurance is offered by various providers, with varying levels of cover and costs, so owners should always read the small print.

Source: TimesOnline and MoneySupermarket

A Quarter of Burglary Victims Affected

When applying a monetary figure to the consequences of suffering a burglary, the first task that might come to mind is weighing up the costs of numerous possessions, such as the television set, a DVD collection or other items around the house.

However, if recent figures are to be taken into account then home owners should take other costs into account – those associated with identity theft.

According to LV, the Liverpool Victoria Friendly Society, around a quarter of those that have suffered a burglary in recent times have also succumbed to ID theft, with the average cost of solving the problem amounting to £2,150.

As a result, the Friendly Society, which provides home insurance and other policies, has offered help to those that are covered by its home insurance policy. Those with LV’s home insurance will now be able to access an identity fraud helpline, which is free of charge.

LV= points out that when burglars enter a home, it can often be too easy for them to find  personal documents as the majority of home owners keep them in the same place. They quote an anonymous fraudster that highlights the issue:

“So many people make my job really easy by sticking all the key documents together in one place. And for all the family too, so you often get three or four identities for the price of one, so to speak”

Fraudsters can easily steal a person’s identity with items such as credit cards, ID cards, National Insurance cards and statements from the bank. As a result, they are highly valued on the black market, making them prized possessions for would-be thieves.

So as well as ensuring that home owners have home insurance, it is being urged that they also have security measures in place to protect themselves. This includes ensuring that personal documents are secure and are not all located inside say, a single handbag.

The problem could be of particular concern if statistics from Sainsbury’s Finance are taken into account from November. From the beginning of April to the end of June 2009, the insurer states that 67,000 claims on home insurance were made as a result of theft.

Sources: LV= Press Release Sept 2009 and Sainsbury’s Finance Press Release Nov 2009

Sainsburys Finance Figures for 2009 showing increase in pet insurance claims

Sainsbury’s Finance has released figures for the first half of 2009, showing a surprisingly large amount of Pet Insurance claims between the period of January to July.

Around 200,000 insurance claims were made by UK pet owners for their cats or dogs during this period, with a total of £77 million paid out to cat or dog owners as a result.

For dogs, these payouts were largely to treat conditions such as skin tumours, lameness, vomiting, lacerations and gastroenteritis. These top five ailments accounted for almost £12 million worth of payouts.

On the other hand, cats are more likely to have suffered a road accident before a pet insurance claim has been made, the reports suggest, with 2,200 claims for such problems in the first 6 months of the year.

However the results, whilst suggesting that there are people out there with pet insurance who are more than willing to make a claim, show that only 26 % of pet owners have insurance.  It means that a further 74 % of pet owners are facing rising veterinary bills without pet insurance cover. If the condition is lameness, which received 7,730 claims earlier in the year, the average value of a claim was £602.56, which would have to be paid by the pet owner alone if no pet insurance is in place.

Speaking about the results, Lucy Hunter, Sainsbury’s Pet Insurance Manager commented, “Our research earlier in the year suggested that many people were looking to cut back on insurance cover generally and pet insurance in particular. However, these new findings from our pet insurance claims index, indicate just how valuable good quality cover can be.”

In total, around 420 different incidents were accounted for by the results, with 240 of them applying to dogs.

Hunter also commented: “The sheer volume of claims made should belie the idea that pet insurance is a luxury. With vet fees rising, the potential cost of treatment for those pet owners doing without cover is considerable and it’s a genuine concern that cats and dogs may be missing out on necessary treatment”.

Source: Sainsbury’s Finance Press Release (Nov 2009)