Insurance World

The car insurance policy has a lot of legal language that most of us do not begin to understand. The essential parts of the car policy are found in the declarations page that you receive when your policy renews. Car insurers are always competing for each other’s policyholders. Every car insurance company uses actuaries and underwriters to help determine the rates.

Rating Territory – Whether you like it or not, your neighbors and friends in your community help determine the rates in your area. These areas are called rating territories by the insurance companies. If there are high losses and frequency in your area then your rates are going to be higher. The opposite is also true.

Liability Insurance – Liability insurance protects you when you are liable in an automobile accident. This is valuable protection for you because this is the portion of the possible that insures you against the highest risk and financial loss. Liability claims because of death and injury are by far the largest. Don’t cut yourself short in this area.

Physical Damage Insurance – This portion of the car insurance policy pertains to your vehicles. It is a good idea to self-insure in this area by purchasing this coverage with high deductibles. Low deductibles no longer warrant the high premiums for the protection afforded. High deductibles will save you thousands of dollars over the life time of a policy.

Car Insurance Discounts – There a number of discounts in car insurance, Vehicles with air bags, seat belts, anti-lock brakes, and anti-theft devices all have discounts. Senior drivers can receive retirement discounts. Young drivers with driver training education receive discounts. Some companies give good student discounts for the young driver with a 3.0 grade point average.

It’s also important to have certain information available when shopping for car insurance. The vehicle identification number for all vehicles, the driver’s license number for all drivers, and your current insurance information will make your shopping easier.

You’ve probably got contents insurance for your belongings but are you aware just how easy it is to fall behind in calculating the value of them?

What do you imagine the average contents of a family home are worth - Ј25,000 or Ј30,000? In fact this figure, for a typical home, is estimated to be over Ј45,000. Apart from your “moveable items” of carpets, furniture, curtains, it’s probable that electrical goods purchased over the last few years explain the sudden rise. It’s not unusual to have three or four mobile phones, a couple of computers, possibly also a laptop. Then there are the TV’s. Apart form the large family wide screen digital HD ready, singing and dancing set, there’s probably a another one in the kitchen and two or three others in the bedrooms, not to mention DVD and video recorders. Probably the children have iPods, gameboys and whatever else is “in” at present. Don’t forget your CD collection – Norwich Union values these at Ј10 each and DVD’s.

Apart from the risk of damage, all the above items are very appealing to the thief, being easy to handle and finding a ready market. Don’t forget the garden, the mowers and garden machinery, contents of the shed and garage, garden furniture and even your tubs and hanging baskets. The value of plants can add up too!

Should you need to make a claim, it’s important that you’re not under insured. If the insurance company judges that you don’t have adequate insurance, the claim will not be fully paid. This means that if you have insured your contents for, say, Ј20,000 and your insurance company considers there would be a value of Ј30,000 to replace them, then there would be a shortfall of Ј10,000.

Insurers handle things in different ways. For example Norwich Union Direct, one of the major insurers, will pay out up to the amount for which you’re covered. It’s left up to you to fund the difference. More Than tells us that their policy on underinsured claims is to reduce them by up to 20%. In fact More

Than are taking action to ensure that clients are more up to date with their cover and so have recently increased the this for all their clients, by 25%.

These increases will apply on the clients’ next renewal dates. No doubt more insurance companies will look at following suit soon.

Whilst you’re thinking of re-assessment, maybe it’s time to check the current figures on your buildings insurance. As well as the house, garage and outbuildings, you may have fixed items such as lighting, hot tubs and permanent garden features. These are covered by your buildings insurance, not your contents. Your insurer will normally work out a quotation based on the number of bedrooms, etc., and your postcode. The insurable figure will be the cost demolition and clearing of the site and re-building your home on the present site, of course.

To help you re-consider the value of your belongings and for additional advice there’s a handy checklist for home owners on the Association of British Insurers, www.abi.org.uk

There are a large number of insurance companies handling both contents and building insurance and, as always, it pays to shop around.