Archive for May 2009

Norwich Union is Dead! Arriva Aviva!

The grand old lady from carrot crunching country just couldn’t cut the mustard with the bosses of the Iberian sounding Aviva and will officially be given the fatal injection at midnight tonight.

As an ex-employee of GA bonus (New Zealand Insurance) do I care?

At the time of the merger / takeover Insuranceblogger had already moved on to pastures new in the city, but I had left them over thirty commercial products on their brand new AS/400 and at the time it was annoying to see the Misers from Perth (GA) and the Wastrels from Whyteleafe (CU) surrender to the much weaker brand.

What a waste of money rebranding is – shareholders must be outraged, mind you they are all at it! The necessary systems centralisation cost which has already happened obviously needs a centralised culture under the same banner – A banner for job and branch streamlining.

I thought Santander was a port in the basque country!

Understanding UK Payment Protection Insurance

Understanding Payment Protection Insurance Cover in the UK

On Monday, Building Societies and Banks will no longer be allowed to sell payment protection insurance at the point of sale.
They will also be banned from selling lump sum upfront single premium policies. This article explains the principles of PPI and how best to purchase it given the recent legislation and changes in the UK economy.

If you have ever bought a new car or a large flat screen television the chances are you paid for it with some type of finance plan, credit card or credit facility, or loan. Apart from being offered a breakdown warranty, in the past you may well have been offered an insurance plan to cover the repayments of the credit should something terrible befall you. This is the basis of payment protection insurance or PPI as it is commonly known.

What does PPI cover?
Payment protection is widely available these days to cover all forms of credit or borrowing. Loan protection products are sold that either individually or collectively cover credit cards, bank loans, car finance and all other monthly payments and outgoings. Until recently you may well have been offered this type of cover when you took out the loan or credit card; however this was made illegal in 2009 after a long enquiry by the Competition Committee looking into the restrictive practices of the major high street banks and lenders. Consequently payment insurance premiums and plans have become a lot cheaper now that independent suppliers have entered the market.
If you own a house under a mortgage you can purchase what is known as Mortgage Payment Protection Insurance or MPPI. This type of plan though often cheaper, will only cover the monthly mortgage payments.
Other protection insurance products are available, the most common being those that cover your salary or income often known as Income Payment Protection Insurance or lifestyle cover. With these types of products you are not limited to agreed repayments and can spend the income benefits as you would your salary or wages.

What does PPI cover you against?
All payment protection products cover you against and will pay a monthly sum to protect your payments, in the event of you suffering from one or a combination of accident, sickness or unemployment.
It is possible to buy these as standalone covers, although accident cover is more often than not sold alongside sickness cover. Unemployment Insurance cover, which protects you against sudden redundancy or unemployment is often sold by itself but because of the nature of the risk, commands a much higher premium.

How long does protection insurance cover you for?
The length of time of the cover is dependent upon how long someone wants the benefits to be payable for in the event of a claim. This varies by insurance company and is often only for twelve months although some of the better more flexible providers offer cover for up to 24 months, at a premium. It should be noted that this type of insurance is viewed by the providing companies as an invaluable short term solution to life’s difficulties and not the correct type of cover for long term illness or disability, for example.

Purchasing payment protection cover
With so many offerings in the market it is a worthwhile exercise to shop around for cover. Most independent suppliers have online applications that literally only take a few seconds to complete. You normally have to supply you age, and how much benefit you would like each month.
When buying you will need to decide how long you wish to wait after you become sick or unemployed, before you start to receive the monthly benefits. This is known as an excess period and you will normally be offered periods of 30, 60 or even 90 days. Obviously the longer you wait the cheaper the monthly premiums will be! Look out for companies offering back to day one cover which will pay you back to day one of your claim once the excess period has passed.
When comparing payment protection insurance plans it is necessary to find one that will cover all of your monthly outgoings. Many providers have different limits and it is important that you find one that will not leave you with a shortfall for repayments!
As with purchasing all types of insurance, but particularly with payment protection cover, it is very important that you check that you are you eligible for cover and not excluded under the policy conditions, which are often more rigorous than for other types of cover.

When comparing payment protection plans for Protection Insurance it is sensible to visit a large respectable, independent supplier such as PPI Insurer of the Year for advice and quotes. Burgesses offer a vast array of information and online quotes backed up by a useful helpline of experts.

Consider Repairers When Getting a Classic Car Insurance Quote Online

Dave Healey of our resident classic car insurance specialists panel has warned of the dangers of getting a classic car insurance quote online without taking into account who might be repairing your classic car if you have an accident or claim. Dave points out that not all car insurance companies are the same and you pay for what you get!

Does Your Car Require Specialist Car Insurance and Repair Services?
By Classic Car Insurance specialist Dave Healey

When choosing a car insurance policy it is wise to consider what is offered in the event of a claim. After all, you are only insuring the car to have the potential to make a claim and the cover is only as good as the insuring company’s claims department.

Although price is most peoples consideration when purchasing car insurance, one of things you should not overlook is who is going to repair your car if it is damaged? Do you own a non-standard car? Surprisingly a large number of vehicles fall into categories that the majority of mainstream insurance companies do not want to cover!

Such examples that may struggle to obtain motor insurance at reasonable rates are owners of performance,prestige, expensive, luxury, foreign, sports, convertibles, modified, veteran, collectors and classic cars. More importantly if you are the owner, if something happens and you need to make a claim on your policy, it is important that your car gets fixed by specialist professionals, using the correct parts. More often than not these type of car repairs require unique tools that are only available through specialist engineers and motor repair shops.

So it is most important when comparing car insurance to also compare the services that a car insurer offers in the event of a claim, especially those regarding choice of repairer.

All specialist car insurers and many insurance companies will offer a choice of repairer – many others will not as they have existing arrangements with so called approved repairers.

Trouble arises when an insurance company insists on employing a particular firm to fix the car against the policyholder’s wishes, and it is not uncommon for major disputes to arise at this point.

For example, the insured may have an expensive Italian sports car bought from an exclusive importer and specialist firm of dealers who added a number of accessories and or modifications to the car at the insured’s request at the time of sale; the same firm may have performed all the routine servicing since the sale and the insured may genuinely feel that they ‘know’ his car better than anyone else could, and that only they, in consequence, should be entrusted to carry out the repairs.

If the repair work quoted in an estimate by the specialist firm is substantially higher than that expected from the approved repairer and the car insurance claims department consider that the approved repairers are capable of carrying out the work to the same standard as the specialists , then the only way out of this impasse is usually for the insurance company to suggest that the insured pays the difference!

Clearly then it is very important to understand what you are buying with your policy when it comes to claims and repairs. Specialist car insurance policies always offer unique claims repair services and if you own an unusual, expensive, classic car or performance motor, then it would be sensible to opt for a policy that includes these repair services to avoid the above situations. What might look like a cheap policy might turn into fools gold in the event of a claim!

Dave Healey is a specialist car insurance expert and UK classic car insurance journalist who writes regularly at the Car Insurance Blog and here at Insurance Blog.

Government Loans for First Time buyers

Those self serving suits from around Threadneedle Street who we saw exposed in Channel 4′s excellent documentary on non-executive banking directors, have been racking their brains recently on how to get the first time buyer market moving.

Laughing into their cafe crappe they must be rubbing their hands in glee that the public furore has shifted onto their erstwhile employers – the MP’s of Westminster or as Sky TV would have us call it ‘The Rotten Government’

So on the back of the Speaker Bashing, the Government in the guise of Lloyds TSB has today launched a new first time buyer mortgage product called- ‘Lend a Hand’ (who thought of that?) – offering 95% loan to value (LTV)

‘Lend a Hand’ or ‘Cop for Your Kids’ as it is soon to be known, which is obviously aimed at the middle classes with kids still at home, offers first time buyers a 95% loan to value (LTV) mortgage by taking a legal charge on a savings account belonging to their parents, grandparents, rich friends or anyone else willing to cough up the dough to get the kids a place to live.

The new product is a fixed rate mortgage at 4.39% for 3 years, and is nearly £100 a month less than the industry average 90% mortgage rate at 5.98%.
Hmm – isn’t the base rate currently 0.5%?

Lloyds are still looking for a 25% deposit but they are allowing this to be made up through a combination of a minimum 5% deposit by the first time buyers and the remainder from the parents or backers savings account.

For example,on a £100,000 property, a 95% LTV mortgage of £95,000 is provided by Lloyds TSB at a three-year fixed rate of 4.39% with a £995 fee. £5,000 is provided by the first-time buyer as a deposit for the property, £20,000 is provided by parents, grandparents or friends and held in the Lloyds TSB ‘Lend a Hand’ savings account earning a fixed rate of 3.5% for 42 months.

Why couldn’t they offer the rate Tax-free like an ISA if they really want to encourage people to get involved ?

So what are the multiples of salary limits and can the first time buyer really afford the mortgage repayments?

Furthermore Insurance Blogger is amazed that the Government thinks that there are lots of people have got £20 grand to spare during the current credit crisis and recession, plus a possible further five thousand on top if they really want their kids out the house?

At least Lloyds TSB isn’t allowed to sell mortgage payment protection insurance at the point of mortgage sale any more! Granny’s pension wouldn’t stretch to that!

Time is Not on your side – Age as insurance rating factor

Time is on my side, yes it is! – not!

Even their satanic majesties have grown old and wrinkly.
It doesn’t matter whether you are young or old – your age is going to to affect what type of cover you are offered for particular insurance products cand more importantly – how much you pay!

Well the young man, ain’t got nothing in the world these days!

So what insurance products favour you or go against you if you are fortunate enough, to be young!

Well if you are young the things that favour you are going to be reflected in risk price for the particular insurance product you are purchasing. If you are young! That’s It!
That’s about all you have got going in your favour – the fact that you are young! – so the costs of products where the risk is to your person tend to be much cheaper the younger you are.

Some examples are:

Health Insurance
Mortgage Payment Protection Insurance
Life Insurance
Critical Illness cover
ASU ( exception of unemployment insurance)
Income Protection Insurance
Travel Insurance
Lifestyle Insurance

All the cheaper products for younger people are concerned with risks to you as a person.

When it comes to Property insurance and Liability insurance – Woah! you are going to have to pay through the nose!
Fact of the matter is that when it comes to young people owning property or using property of others, the risks to themselves and others is far far greater than for older people and people with more life experience.

So young people in general, are going to have to pay a lot more for the following types of insurance:

Car Insurance
Home Insurance
Boat Insurance
Trademans Insurance
Commercial Insurance
Professional Indemnity Insurance

Not surprisingly if you are older the reverse applies

Time and Insurance wait for no man!