Insurance news

Older News Stories from 2011

Tragic M5 Crash Fuels Concern For Road Safety - 9th December 2011

Two separate road incidents have made the news in the last couple of months that should make all of us sit up and take note. The first incident occurred on the evening of the 4th November which took the lives of seven people. The second happened last week in Japan as 14 vehicles including eight Ferrari’s, three Mercedes and a Lamborghini were involved in a very expensive pile up though thankfully no one was seriously injured.

The cause of the M5 crash remains hotly debated however many fingers are pointing at smoke encroaching across the road from a near-by firework display at Taunton Rugby Club however there are many sceptics who suggest that the amount of smoke required to reduce visibility to just a few metres could not have been generated by a modest firework display at a local rugby club.

Other commentators are suggesting a car performing an unsafe manoeuvre would have caused the lorries to jack-knife. In any case there are several safety organisations and campaigners who are calling for lessons to be learnt. In particular it seems that speed and distance on motorways are two key issues. Many are saying that had vehicles been observing correct speeds and distances the severity of the incident may have been minimised.

Could a greater gap between cars have prevented further incident and are people aware of the stopping distance of a vehicle? Including thinking time a normal domestic vehicle travelling at 70mph will take 96 metres to stop in dry conditions, 170 metres in the wet. At 80mph this rises to 121.9 metres and 219 metres in dry and wet respectively.* Travelling down the motorway it is clear that these stopping distances are not always correctly catered for.

It will be a number of weeks still until the police investigation draws conclusion and any appropriate action is begun. Until such time please follow these top tips for driving in poor visibility:

Reduce your speed and ensure your lights are on.
Do not use your high beam as this will just light up the fog reducing your visibility further.
Turn your fog lights on.
Leave significant space between you and the vehicle in front.
Do not allow yourself to gradually speed up. Attempt to maintain a constant speed so that vehicles following do not inadvertently close up.
As far as possible keep to your lane.
Remember that it is hard to judge distance to the rear lights of the car in front

* stopping distance statistics sourced from www.driveandstayalive.com

Dreaming of a White Christmas? - 7th November 2011

We all might be keen for a picture perfect winter but lets not forget the chaos on the roads last year not to mention the property claims brought about by the adverse weather. Here are some simple tips which you should follow in order to avoid suffering this winter and having to reach for the claims line phone number.

Pipes –

Protect your pipes with some quality lagging. Look for products conforming to the following standard – BS6700

Identify any dripping taps and faulty ball valves now, before its too late, as these often cause waste pipes to freeze.

Make sure your heating systems have been serviced and up to scratch. Be sure to drain any idle boilers.

Be Prepared –

Ensure you are aware of the layout of the water, gas and electricity services within your property. Ensure this information is recorded and available.

Know where your main and subsidiary stop-taps are and that they are all serviceable.

Make sure you have the numbers of a few relevant tradesmen. Remember if you have a problem due to the weather then others will as well. Be sure to have two or three different contractor details to hand.

Be sure to tackle ‘ice dams’ which form on the guttering and edges of roofs, holding the snow back without anywhere to run off when it melts. You may find it then making its way through the roof.

Should the Worse Occur –

Isolate the water immediately at the stop cock. Turn the cold taps on and drain the system.

Turn off the central heating.

Protect and remove any vulnerable contents

Never use naked flames to thaw pipes or equipment blocked with ice.

Monitor the amount of snow on the roof and clear when possible.

A Fleeting Opportunity.... 1st November 2011

It is no secret that the Private Motor insurance market has seen sharp increases over the last couple of years in terms of premium. This is not born out of greed but necessity. There are a variety of reasons for these increases (inflated and sometimes false personal injury claims, the increase cost of labour for post-accident repairs, the drive for accident management companies refer personal injury cases in return for a fee etcetera) but the simple fact is that insurers are paying out more in claims than they are collecting in premium. It should be obvious to all that this is unsustainable and so prices have to go up. So why should Motor Fleet be any different? Well it isn't, the same vehicles are making the same claims and in some cases the loss ratios are higher as drivers feel less responsibility given the vehicles are not technically theirs and they don't pay the premiums.

It is the general view of the powers that be in insurance circles that increases on Motor Fleet policies are long overdue. Alan Boswell Insurance MD says "The bottom line is fleet rates should increase. The market is going up a it but the increase is not enough to offset the losses, and claims are definitely still outweighing premiums". Roger Ball, head of Commercial Motor at Allianz has stated that "...there is a fair bit of catching up to do because claims were rising without an increase in premiums for some time."

So it seems inevitable that as claims continue to rise which will continue to encourage fleet rates to rise. As brokers we are keen to assist in making sure our clients have the most appropriate policy at a premium as competitive as we can make it. Sometimes a sharp rise in premium is inevitable if you have not had a perfect claims history or if you have a number of young or inexperienced drivers so 'shopping around' is not always the answer. We are happy to go to additional lengths in order to assist in presenting a positive risk to insurers. There are a number of ways in which this can be achieved including:

The implementation of incentive schemes for drivers who remain claim and conviction free
Driving courses, seminars etcetera
Risk awareness training
Formal induction process for new drivers

The more information we can show the insurers about how the fleet is positively managed the better. So if you are already a client and would like to discuss how you might look to implement any of the above then please get in touch. If you are not yet a client of ours this is the sort of advice you will enjoy as a client which I suspect you are not currently being provided by your existing broker. Please do not hesitate to contact us for a quotation.

Source: www.insurancetimes.co.uk

RISKY BUSINESS 1. Playing With Fire - 31st October 2011

Legislation is often a difficult beast and the onus remains on you to make sure you know what it is, how it is complied with and what the consequences are. Following a survey by insurers we often find that many clients are not compliant with certain aspects of legislation.

Not everything ties in with insurance but there are some areas which are closely linked. Insurance is a last line of defence, at all times we should be looking to mitigate our losses and nip any problems in the bud before they bloom into claims. The point of legislation is to lay ground rules which encourage the good management of risk, loss and injury prevention.

Through this series we will be looking at areas of legislation that you should be aware of., starting with Fire.

FIRE

The Regulatory Reform (Fire Safety) Order 2005 applies to all non-domestic properties in England and Wales. This includes the common parts of properties in multiple occupation (converted houses, blocks of flats etcetera). This law applies to all of the following people:

Person responsible for a business premises.
An Employer / Self Employed person with a or occupying a business premises.
Responsible for part of a dwelling where that portion is solely used for business purposes
A charity or voluntary organisation.
A contractor with a degree of control over any premises.
Providing accommodation for paying guests.

This law states that the responsible person must carry out a fire safety risk assessment and implement a fire management plan.

There are options to engage specialised professionals to carry out such tasks on your behalf (we are able to put you in touch with such a firm) or if you feel confident enough to undertake the task yourself you can visit the following sites for advice and even downloadable risk assessment forms:

www.communities.gov.uk/fire/firesafety/firesafetylaw
www.hse.gov.uk

The consequences of ignoring this legislation can often end in large fines and in some cases custodial sentences for those individuals responsible, not to mention the risk of injury or death as a result of fire.

Telling a prospective insurer that you have a complete fire risk assessment in place and that it is regularly monitored updated and recorded demonstrates that you are looking after their interests and indicates that you are likely to manage your property and business in a suitable and conscientious manner making it easier for us to find a suitable and competitive insurer.

Clients for Cash - 23rd September 2011

You may well have noticed that there has been some press recently about a possible ban on referral fees. This has come about primarily to try and curb the rising claims culture and the 'bullying' tactics used by many 'no win-no fee' and personal injury solicitors. As a broker that works closely with its clients during claims we are seeing a significant rise in personal injury claims from third parties. It is often difficult to reveal to the client that the third party is claiming for injury if the impact was negligible. Of course we appreciate there are some genuine cases of injury and indeed anyone suffering as a result of another's negligence should be compensated. So the government are putting forward plans to stop insurers referring cases to injury solicitors in return for a referral fee or 'kick-back'.

Allianz Insurance have come out recently to say that in fact its referral fee income for last year was about £1.5 million which is less than 1% of its offering property. French owned insurer Groupama was even more of a drop in the ocean at £150,000 earned in referral fees last year which equates to under 0.05% of its turnover. These figures do not just take into account kick-backs from solicitors but also money paid for the referral of business in the first place. If we look at some of the larger direct markets, such as Admiral who revealed that 6% of its profit is made from referral fee income then perhaps we can see where a ban might have an effect.

This issue is currently a hot topic about the commons and has recently turned up some interesting news - in that Jonathon Djanogly would be in a position to gain financially through his piloted reforms to the 'no win - no fee' system given that he is a partner in a Lloyds member. It should be noted that it is shadow justice minister, Andy Slaughter making the most of this fact so how much of it is political rhetoric and how much is genuine concern remains a question.

Many carry the theory that a reduction in claims culture will bring about a reduction in claims and therefore the insurers will benefit and pass some saving onto the customer. Others disagree by saying that any benefit in the reduction of claims costs will be negated by the void in profit that is left when referral fees are no more.

So the aim is to curb claims culture, will a ban on referral fees help to aid this? The answer remains to be seen but my guess is probably. Will it have a dramatic effect? - unlikely. Will it save clients money? - doubtful.

What is key is to make sure you are not out there on your own in the event of a claim. As a broker we know that your opinion of how good an insurer actually is, is often forged during the claims process. To make your life easier we have dedicated claims handlers within our office who will guide you through the process and liaise with insurers, legal professionals and all the people necessary to ensure that you are left with hassle free experience and peace of mind.

Sources: www.bbc.co.uk / www.insurancetimes.co.uk

New Initiative Set to Combat Uninsured Drivers

You may have seen the television campaign warning you of the impending change to motor insurance law. Hailed as the biggest change in motor insurance law since motor insurance became compulsory under the Road Traffic Act the new law means that unless a vehicle is declared SORN it must be insured.

Now for most of us this won’t make a difference as we have policies which either automatically renew or for which we receive reminders. If you are a motor trader, have multiple vehicles, classic cars or are an enthusiast with a number of 'hobby cars' then this change in legislation will certainly effect you.

The idea behind the law is to make it easier to eliminate uninsured drivers by simply removing the grey areas and saying that if you own a car it must be insured. Up until now it was only an offence to drive an uninsured vehicle. As of the 20th June it will be compulsory to insure a vehicle unless you declare it SORN (Statutory Off the Road Notification). The penalty for not having appropriate insurance in place starts at £100 and increases in relation to the amount of time you continue to remain uninsured.

This will be enforced by comparing the DVLA records of registered vehicles / keepers and the Motor Insurance Database which holds a list of all vehicles which are insured. Vehicles which are registered but do not appear on the Motor Insurance Database will be sent a letter requesting £100 along with a demand that insurance is taken out. This also means that the vehicle should be insured by the registered keeper.

Senior Insurance figures suggest that uninsured drivers cost the UK driver upwards of £30 per year in premium. Graeme Trudgill from British Insurance Brokers Association calls the new measure a “bold move to tackle uninsured driving and will make the roads safer”. According to major insurer Aviva, uninsured motorists are more likely to skip their MOT and will apparently be six times more likely to drive an unsafe vehicle, three times more likely to land themselves a conviction for driving without due care and attention and a whopping ten times more likely to pick up a drink driving conviction. Unsurprisingly, given their research, Aviva welcome the new CIE rules stating that it ‘will help increase the level of accountability and responsibility on Britain’s roads’.

The main opposition argument against seems to be a general feeling that this is all a way of generating additional funds at the expense of otherwise honest public and will not have any real effect - given that most uninsured vehicles seized are not claimed as it is cheaper to buy a new vehicle than it is to shell out for the insurance. In addition statistics show that the majority of people convicted of driving uninsured are in fact driving an insured vehicle… it is just that they are not the insured person. The new CIE scheme will not be able to make this distinction.

I would strongly encourage those who might have project vehicles, private collections or businesses with fleets of vehicles to be increasingly more vigilant ensuring that you either SORN your vehicle or make sure it is insured.

Please do not hesitate to contact us for further clarification on the new legislation, for further advice on how to best insure your vehicle(s) or indeed for a quotation.

Flooding - Insurers Face £10,000,000 in Losses

The Association of British Insurers (ABI) last week indicated that the recent Cornwall floods will incur insurers losses in excess of £10,000,000. Floods which dominated Cornish streets turning towns like Mevagissey into a quasi English Venice, are set to cost insurers a substantial sum as the clean up operation reveals more and more damage.

The ABI recently announced that last year's Cumbrian floods cost insurers a mammoth £175,000,000. Many sectors, including leading insurers and organisations such as the ABI, have called upon the government to implement a long-term solution to flood management - prevention being the better part of the cure. In the meantime, it will not surprise anyone to see rates for flood cover increase.

European Court Driving Women's Insurance Premiums up 30%?

According to research conducted by 'Girl Motor', insurance premiums for young women could rise by up to 30% if the European Court of Justice adjudicates that using gender to determine premium is discriminatory. This news seems to have been met with general scepticism, as industry commentators suggest that it could give rise to a spate of discriminatory charges from other demographics such as young drivers and people living in certain areas etc. The Director of 'Girl Motor', David Harlow, commented "The idea that age could be removed from the underwriting armoury is as daft as suggesting that young drivers are no more likely to claim than someone in middle age". In any case, we will have to wait until early next year when the case is brought before the court...

Every Little Helps - Insurance Premium Tax Rises to 6%

Currently set at 5%, The Right Honourable Mr G Osborne has decreed as part of the recent Budget that Insurance Premium Tax (IPT) will rise to 6% in January. Whilst some in the industry were predicting a more substantial increase, with many commentators banding around 10% as a likely figure, it is reported that younger drivers will face an average increase in the region of £18. With motor premiums currently on the increase, it will all be adding up.

Policies where the IPT rate follows VAT, such as travel insurance products, will see the rate of tax rise to 20%.

IPT is no stranger to increases. Introduced in 1994 at 2.5%, it was then increased to 4% in 1997 on all general insurance products. Two years later, in 1999, it rose to its present level of 5%.

These increases will come into effect on 4th January 2011.