The age of an individual has always been an issue when it comes to insurance. Yet, it seems that with the spotlight currently firmly on the industry as it finds itself at the heart of the economic crisis (at the same time striving to assure customers that cover is no less relevant and affordable), a wave of criticism regarding age discrimination by insurers has been seen in the media. So are we being discriminated against by insurance companies?
One of the issues that can be seen to hinder the trustworthiness of these discrimination claims is the fact that they seem to have been borne from the work of comparison websites. Without mentioning any comparison site specifically here (and I endorse the usefulness of such services), reports at moneynews.co.uk state of one site’s research which found “that young drivers pay more for their insurance”. (This is in April 2009 under the headline: Car Insurance Industry Rife with Discrimination.)
The first problem here is that this is nothing new: 17 and 18 year-old drivers have had to pay expensive premiums for car insurance cover for years now, and the shocker is that this is still increasing (as are most policies). I acknowledge, also, that a 17 year-old girl must pay 58 percent more than her 18 year-old friend – and this is alarming.
However, I do think we need to understand two things. The first is the process by which car insurance premiums are calculated for individuals with no or minimal driving background. Other than their peer group, where else can insurance companies look in order to ascertain the risk and its subsequent monetary equivalent? The second thing to remember is when the implied (or sometimes, outright stated) answer to a newsworthy issue is to compare quotes from different companies, possibly via a very hand comparison site, then such “reports” are likely to be biased.
That said, in a separate report at the same site (and with research carried about by the same comparison website), a more unfair and less justifiable trend has emerged in the travel insurance sector.
The report, Travel Insurance Prices ‘Hiked Overnight’, states that a 66 year-old individual will pay an average of 106 percent more for a policy than a 65 year-old – a difference that is far more extreme, and which doesn’t appear to need to depend so much on a general peer risk assessment when an individual medical report and the risk of destination can be taken into account. I suppose the lesson here is to keep an eye on your policies with the same fervour you question your information sources.
Home Insurance Fraud: Don’t Be Lured to the Darkside
When the going gets tough, the tough sometimes get fraudulent. Recent figures released by the ABI (Association of British Insurers) have shown a record level of fraudulent insurance claims, proving people are willing to use their insurance policies as a way of bringing in extra cash. According to statistics, 2000 fraudulent claims are made every week, amounting to an estimated value of £14 million.
What is insurance fraud?
If you make an insurance claim for something that either hasn’t happened, or you know to be wrong, you’re committing insurance fraud.
How much fraud is there?
The most common form of fraudulent claims is for home insurance - 55,400 frauds were detected last year at an estimated value of £110 million.
Why are there so many claims?
There are more opportunities for fraudulent home insurance claims than for any other class of insurance.
Car insurance fraud, for example, requires a little planning to orchestrate a convincing accident or theft. However, spilling paint on your sofa in order to get a new three-piece suite, is much easier.
Who’s guilty of insurance fraud?
A YouGov survey of 3000 adults, showed one-in-five admitted they’d be tempted to cheat on their insurance - despite the likelihood of getting caught.
But if you think cheating’s a quick way to boost your bank account, think again – the insurance inspectors will be after you!
The crackdown on fraudsters
“Fraud thrives in a recession, so insurers are intensifying their crackdown on insurance cheats,” says Nick Starling, ABI’s Director of General Insurance and Health, on the ABI website.
Claimants may have to provide minute detail, and may even find forensic experts getting involved, all in an effort to stem the tide of fraudulent claims. And if found out, fraudsters may be blacklisted by insurers, or may even gain a criminal record.
Fraud makes home insurance more expensive
Cracking down also prevents honest policyholders paying the price.
“Fraud adds an extra £40 a year to the average premium,” says Starling, “which is why the harder we make it for the cheats, the more competitive premiums will be for honest customers.”
For more information on home cover, read Confused.com’s Home Insurance Buyer’s Guide.
How to Cope if you Lose Your Job - A Survival Guide to Redundancy
Tips and advice on how to deal with being made redundant
The dreaded ‘R’ word. It’s one you hope never to hear. But, worryingly, redundancies have been on the increase ever since the economy took a tumble.
The current economic climate has forced many companies to close and put many jobs under threat. Employers often resort to making staff redundant as a way of cutting costs. Implementation of new technology/systems or a workplace relocation can also deem a job redundant.
Who can be made redundant?
• Any employee under contract of employment – written, verbal or a combination. Just turning up to work constitutes an agreement of employment.
Who is eligible for a redundancy payout?
To be eligible for a payment, you should meet all of the following criteria.
• You need to have been in continuous employment for at least two years.
• You are over the age of 20 at the time of dismissal.
• You have been dismissed by reason of redundancy.
What are your entitlements?
Unless a more generous settlement is written into your employment contract, you will receive only the statutory minimum redundancy pay. This is based on how long you’ve been employed, your age and your weekly pay.
Statutory Minimum Redundancy Pay
The amount is calculated as:
• Aged 41 or over - One and a half weeks’ pay for every full year
• Aged 22-41 - One week’s pay for every full year
• Aged 18-22 - half a week's gross pay for each year worked (as long as you worked in the same job beyond the age of 20).
If your employer doesn’t give you redundancy pay when you’re entitled to it, you should write to them asking for payment. If your employer still refuses to pay or cannot make the payment, you could make an appeal to an Employment Tribunal.
Note: The 2009 budget announced that the weekly rate of statutory redundancy pay will increase to £380.
Resource: The Advice Centre
Tips for dealing with redundancy
Budget: Draw up a comprehensive plan of your out-goings. Where can you save money and how can you make best use of your cash? Speak to a financial advisor if necessary.
Claim your benefits: Depending on your savings and record of National Insurance contributions, you may be entitled to state benefits. Make an appointment with your local benefits office to find out more.
Invest: If you’re lucky enough to receive a substantial payout, think carefully about what to do with the money. You could pay off debts, or put it in a higher-interest savings account or ISA. Again, consider speaking to a financial advisor if necessary.
PPI: If you’re still employed and worried about the future of your job, you might consider getting payment protection insurance (PPI)? This could help pay a proportion of your monthly bills and offer support for a fixed period while you hunt for a new job.
Source: How to Cope if you Lose your Job
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