House Insurance explained
From a straightforward burglary to a building-related disaster, nearly every home is at risk from some form of upset or another. While an insurance company cannot repair the emotional damage of a fire or theft, it can provide someone with adequate financial compensation for what they have lost. A house insurance policy is therefore one of the first things many people arrange when they move into a new house or flat.
House insurance is available from every major UK insurance provider, plus a few smaller and more specialist firms. Even banks and supermarkets are now widely known to offer cover. Although typically a relatively inexpensive product, home cover quotes can vary widely from a few pounds per month upwards.
Cover comes in two forms - buildings insurance and contents insurance. Some people will need both while others will only need one type of protection. Buildings insurance protects the actual structure of the property from damage, be it through earthquake, flooding, or something like subsidence (Though note that subsidence cover is no longer always offered as standard and you may have to pay extra for this protection). Again, an insurance policy is not going to change the fact a home is knee deep in water, but it will provide cash to repair the damage. Generally speaking, buildings insurance will include kitchen and bathroom fittings, and other permanent fixtures - more on this later.
Contents insurance protects the general belongings kept inside the home. Here we are talking about regular personal property in the form of electrical appliances like televisions and computer consoles, furniture including sofas and tables, smaller items like books and CDs, kitchenware and appliances, jewellery and clothing. Pretty much anything you would take with you if you were to move house is normally covered by this type of product.
If you rent where you are living you will generally not need buildings insurance - if the property does not belong to you the landlord should have this in place with landlords insurance. You will however need contents insurance against the likes of burglary or fire. Likewise, if you’re a landlord who rents out a house which does not generally have any of your personal property in it, you’ll only need buildings insurance.
When comparing house insurance policies, the key is not to look only at the price but also at what is included. For example, insurers differ in what they class as being eligible for buildings insurance. Some firms will allow you to insure a garden shed as a matter of course, while others will not. Some policies will include protection for exterior walls and paved driveways, others will not.
Contents insurance has some similar differences between providers. Many will offer accidental damage, meaning a payout can be applied for if you drop or smash a valuable item like an mP3 player within the home. Some will even offer you cover for some items if you take them out of the house.
House insurance could be kept as low as possible by making sure the home is as secure as possible. Fitting alarms, superior door locks and other measures could help bring down the cost of a premium. Smoke alarms may also help. Another common trap people fall into is undertaking major DIY building work without first consulting their insurer. If they happen to damage the property’s structure, they may not be covered for this if they are not a qualified professional.
Pay As You Drive Car Insurance explained
Pay as you drive car insurance is a relatively recent introduction to the product portfolio of some insurance companies. The basic assumption behind this product type is that the less a policyholder drives, the less they will pay in insurance premiums.
One of the fundamental principles of car insurance statistics is that bad things are more likely to happen when a car is driven than when it is stationary. The pay as you drive car insurance products offer a price structure that measures and reflects this reality.
Policies of this type operate on the basis of the more the policyholder drives, the more they are at risk and therefore the more they should pay in insurance premiums. Conversely, those people who drive less are less likely to have an accident and their premium payments should typically be lower as a result.
So how does it work?
The insurance companies offering this type of policy will typically give the policyholder a small Global Positioning System (GPS) box for installation into their vehicle. This GPS will link via satellite communications directly to the insurance company’s computer systems. The GPS will automatically provide them with the all information they need about the driver’s usage patterns. As an example, it will tell them the time the car is being driven, for how long, where, and on what types of road such as motorway or dual carriageway etc.
The insurance company then uses the actual information obtained about the usage to work out the risk and thereby, the premium that the policyholder will need to pay at the end of the next, normally monthly, period.
As examples, many insurance companies regard night driving as higher risk than daylight driving and they will price this more highly in their bill. They will also regard some types of road riskier than others and, for example, may well price mileage done on motorways as lower risk than driving done on standard roads.
This type of insurance typically contains two components. The first part relates to insurance for the car when it is not being driven and covers things such as theft, vandalism and other accidental damage done to the car by someone else - in effect what many people would term ‘third party insurance’. To understand and price appropriately, the insurance company will still need to know about where the car will normally be kept and in what conditions such as on or off street parking etc. Other information relevant here is the type of car, the claims history and any driving convictions.
This in effect is the fixed part of the insurance premium and will be payable even if the car is not used in that month. These components of the ‘stationary insurance’ part will not be affected at all by the GPS figures.
The second part of the insurance relates to the variable component – in other words where, when and how the policyholder is driving. This is where the GPS is used and how total premium payments are derived.
In some cases pay as you drive insurance could help reduce the annual premium considerably. As most insurance companies may typically calculate their premiums based in part upon the assumption of an annual mileage of 11,000 miles, drivers that do less than this ‘in reality’ may benefit. Drivers using their vehicle mainly for daytime driving on motorways and with lower mileage may also benefit. For many drivers it may be advisable to analyse carefully their normal car usage before a cost comparison between this insurance and other types can be made.
Cover for your keys
If your keys are lost or stolen the consequences can be distressing and time-consuming. It is not just a question of the missing keys of course, but the locks to which they give free access to your car or home. Lost or stolen keys invariably mean the swift and costly replacement of the relevant locks, therefore. This is why a number of insurance companies specifically include cover for your keys in their insurance policies.
Many comprehensive motor insurance policies, for example, will include provision not only for the replacement of lost or stolen car keys, but also for the replacement of the locks that have been compromised as a result. If you are not sure whether such items are covered, check your motor insurance policy or ask your broker or insurance adviser.
Occasionally, cover for your motor car keys might also be included in your house contents insurance policy. This is less common, so it might be worthwhile checking your contents insurance rather than assuming that the loss or theft of car keys is also included.
Home contents insurance is, however, almost certain to include cover for your keys to the house itself, any alarms or safes, and any garages or outbuildings – and, of course, the replacement of the related locks. If any of these keys goes missing, then you are likely to need to decide quickly whether there is any chance of their having fallen into the wrong hands and potentially used for a burglary. Adequate insurance cover for your keys will also give you the comfort of knowing that the relevant locks can be swiftly replaced.
- Although such insurance certainly provides peace of mind, there are a number of steps you can take to minimise the risk of loss or theft of your keys:
- Whether at home or about and about, keep your keys out of sight;
- Do not leave keys in an unattended bag in any public place, public transport, a club or the pub;
- Do not leave keys where they can be seen – such as a hall table or on hooks close to the back or front door;
- Remove keys from window locks and door locks, to stop burglars from using them as an easy means of exit;
- When you are out and about or at work, keep your keys separately from any note or record of your address – you would not want to hand any thief your keys together with the details of where you live;
- It is a good idea to change the locks when moving into a new house, whether it has been vacated by previous tenants or owner-occupiers. You have no way of knowing who else they might have given keys to;
- Whenever your keys have been lost or stolen, change the relevant locks as soon as possible, particularly if your address could have been stolen too or any thief might have a way of knowing where you live.
Cover for your keys will effectively compensate you for any financial loss in replacing the keys and relevant locks, but the above measures could help you avoid the stress and inconvenience of having to replace them in the first place.
Van insurance
Have you thought about how much you are paying for your van insurance; have you reviewed the policy recently; or is the policy just something you reluctantly renew each year simply because the law requires you to have a minimum level of third party insurance?
If you run a van to help with your business you probably know what an invaluable workhorse it can be. By the same token, adequate insurance cover for such a business asset probably makes a great deal of sense after all. The good news is that, with a little research and a review of just what you need to protect that asset, reasonably priced insurance need not mean skimping on the cover you buy.
Although your insurer obviously needs to know that the vehicle will be used for business purposes, there are the same options regarding the level of cover available for a commercial van as a private car: namely, third party only, third party, fire and theft and comprehensive insurance (depending on the value of the van you want to insure). Once you have made this basic choice, there remain a number of other areas in which you can ensure you are getting the best value for money for your van insurance.
One detail that is sometimes overlooked, for example, is that some insurers will offer a discount on the premiums for something as simple as painting your business logo on the side on the vehicle. Further discounts could be available by fitting security and immobilisation devices to prevent or deter theft. If you elected for comprehensive cover, most policies will include cover for the theft of personal possessions (up to a certain limit of value) from the van, but it should be remembered that most will specifically exclude the theft of the tools of your trade (which you will probably avoid leaving in the vehicle for any length of time and for which you might wish to consider separate insurance).
As with all motor insurance, the premiums you pay will also depend on the size and type of the commercial vehicle. Different insurers will have their own different ways of categorising commercial vans, but a common and quite useful rule of thumb is to think in terms of small, medium and large vans, typically up to 3.5 tonnes in unladen weight.
In assessing the risk, insurers will also, of course, need to know who will be driving the van and where it is going to be used. If there are only named drivers on the policy, of course, discounts can be secured for safer, claims-free drivers and many insurers will, in fact, allow the transfer of any no-claims discounts from the insurance on a private car to the van insurance. Although many insurers will limit the full cover provided by the van insurance to the territorial UK only, most will also offer as an option, and the payment of an additional premium, the same level of cover when driving throughout the whole of Europe.
Switching gas suppliers
It can be difficult knowing when to switch gas suppliers – are prices going up, are they about to fall, or are we in a period of relative stability? The answer could influence whether now is a good moment to switch. For those who have never switched gas suppliers, however, it is widely accepted that a change could result in significant savings on their gas bills.
Dealing with the easier group of consumers first, it is generally reckoned that those who have never switched suppliers before could be saving 20% on their gas bills. The reason for this is a combination of the consumer’s inertia – staying with the same supplier at the same tariff, whatever is happening to prices in the wider, competitive market – and the supplier’s reliance on that very same consumer inertia to maximize the returns on the sale of energy. Consumers who have never switched will be long-term customers of British Gas (or Scottish Gas north of the border) and stand to gain a significant reduction, therefore, simply by switching suppliers at any time.
For those consumers who have taken a keenly healthy interest in what they are paying for their energy bills, however, it is more difficult deciding whether now is the right moment to switch. Whether prices are about to rise, or even if they are about to fall, all suppliers are likely to follow suit and adjust their prices accordingly, but there is no way of knowing whether each company will maintain its relative price differential in the market after the price adjustment. You could end up paying relatively more with a new supplier, compared with the one from which you had recently switched.
Switching gas suppliers, therefore, is more safely and certainly done when prices have reached an assumed degree of stability and all of the companies are therefore playing on the same level playing field.
If you have decided that switching gas suppliers could lead to savings on your monthly expenditure, the following might be some of the points you want to take into account when comparing prices and choosing a tariff:
Whichever supplier you choose, remember that payment of the monthly account by direct debit is nearly always going to be cheaper (up to 10% in some cases). This way, the supplier knows that they will always be paid and, in the event that they have not been able to take a meter reading, will send an estimate which invariably results in your overpaying for that month.
Switching suppliers could give you the opportunity to choose a so-called “capped” tariff which effectively fixes the price for which you will be paying for your gas over the following two to three years. Although you will be paying slightly more for the certainty of a fixed price, at least it can help you to budget for a known amount and you are freed from any worry about price rises that you cannot afford. If the supplier’s prices are reduced, however, you will lose out.
For the past year or so, the energy regulator, Ofgem, has allowed gas suppliers to require their customers to sign up for a yearly contract of supply, thus preventing ay switch to a competitor supply during the term of the contract. Not all of the suppliers demand such a contract, so if you value the freedom of switching gas suppliers whenever you choose, you might want to avoid those who will “lock you in”.
Six Tips to Help You Beat a Recession
With financial markets the world over slowing down as a result of the credit crunch, and people preparing to tighten their belts in light of the looming financial crisis, here are six easy ways to help keep yourself afloat during these economically turbulent times.
1. Don’t panic.
It’s easy to lose your head a little bit when the media seems to be talking about nothing but the terrible financial quagmire we’re in, but try and remember that a lot of it is media scaremongering. Bad news sells papers, and so statistics like rising food prices and employment rates and tumbling property values are exaggerated. As bad as things might seem, remember that most recessions last between 12 and 18 months, and then things get back to normal. This isn’t 1929, and it’s certainly not the end of the world.
2. Plan a budget.
Make sure you know your finances inside out. That means knowing how much you’re bringing in, how much you’re paying out, and how much you have left at the end of the month. Don’t spend more than you’re earning if at all possible. Avoid extravagant purchases, and save whatever you can in order to provide yourself with a buffer should you lose your job (3 months’ expenditure is the standard advice, 6 months’ worth if you’re freelance or self-employed).
3. Consider buying stocks.
It sounds counter-intuitive, but if you’ve got a little spare money lying around, consider investing in stocks. Share prices tend to drop during a recession only to pick up afterwards, so it’s possible to make a tidy profit if you’re willing to wait out the dip. However, while it sounds obvious, you need to remember that some companies won’t survive the recession, which means you could lose out if you back the wrong horse. Tread carefully, and never invest more than you can afford to lose.
4. Shop around for a better deal.
If you’ve put off switching your gas and electricity provider previously, now might be a great time to consider a switch. For a little bit of effort spent scouting around, there are definite savings to be made, and most people could end up with a substantial amount of cash in their pocket as a result.
5. Don’t change jobs.
In an economic slowdown, many companies are trying to save money. The easiest way of doing this is to lay off staff who are surplus to requirements. Additionally, many companies reward loyalty by getting rid of the newest staff members first, and so attempting to switch jobs during these shaky times might backfire on you. Unless you absolutely have to leave, you might be better off staying where you are, at least until the economic climate becomes more favourable.
6. Embrace opportunities.
If the worst comes to the worst and you do end up losing your job as a result of the recession, don’t let it get you down. There are still lots of opportunities available to you, and while some industries (construction, finance, property and the motor industry, for example) may suffer as a result of the economic slowdown, others – such as education – may not take any noticeable damage, or may even improve. If you’d planned on switching to a new career, now might be a good time, and remember: recessions don’t last forever, so even if you don’t want to switch industry, you should be able to find work relatively soon.
Student possessions insurance
Students and insurance are two words you do not often find together in the same sentence. Whether they have their own room in halls of residence or share a house with others, there’s a sense of their living a life that is different to many other people. Student possessions insurance takes into account some of those differences, reflecting both the risks and the financial needs and circumstances of students.
One thing remains the same, though. Even students are likely to have more possessions – and more valuable possessions – than they might initially realise. Laptops and computers, DVD collections, sound systems, textbooks, all can add up to a very tidy sum, that can represent a great deal of money if they need to be replaced after they have gone missing or been damaged. Although insurance is unlikely to be uppermost in many a young person’s mind when they set off for university or college, therefore, student possessions insurance can save a great deal of expensive heartache further into the term.
The most straight forward and probably the cheapest form of cover is likely to be offered when the possessions are kept all together in the student’s own room, such as the one in halls of residence. In this case the insurance usually covers just the possessions actually kept in the room and is likely to cost just a few pounds a month.
Many students, of course, do not live on campus, but share a house with fellow students or others. Cover here can be slightly more complicated or more difficult to arrange because of the assessed risks by certain insurers. If the house is shared, for example, there could be a greater risk of theft, not only by dishonest flat-mates but also by their many friends and visitors in turn. For this reason, some insurance policies will restrict cover for loss that occurs only in the event of a forced entry to the premises and would not cover theft that seems to have been committed by other housemates or their guests and visitors.
Since such students will probably be renting the house from a landlord, some might think that the landlord will take care of the insurance. Although the landlord is, indeed, likely to have landlord insurance that covers risks to the building itself from such things as floods and fire, it remains the tenants’ responsibility to insure their possessions against any damage caused in such emergencies. Student possessions insurance, therefore, should provide enough cover for the replacement of possessions in the event of damage by fire, flooding and other such perils.
Where accommodation is shared, therefore, a perfectly viable solution might lie in insuring valuable possessions separately, under their own policies. Thus, a computer or laptop, personal sound systems, books or a bike could all be insured entirely separately. One of the advantages to this approach to student possessions insurance is that items – such as laptops – taken away from the house, for use anywhere within the UK, will continue to be fully covered.
Travel insurance
Time was when travel insurance tended to be sold as a single, standard package, one trip at a time, wherever in the world you were going and whatever the purpose of the travel. This posed two major drawbacks: the standard package could well result in your buying cover that you really did not need; or – potentially worse – leave you without a particular type or aspect of cover which you really did need.
Travel insurance today, however, is far more sophisticated and can be tailored to fit individual needs to ensure that vital cover is included, while unnecessary elements can be excluded and full value for money enjoyed. Features of such insurance, therefore, are likely to include the following:
Annual or single-trip
One of the most helpful innovations has been the marketing of annual insurance that gives the reassurance of knowing that every trip is covered. This avoids last-minute dashing around to arrange what could prove to be more expensive single-trip insurance and recognizes that many people travel abroad more frequently these days. For the less adventurous, however, it is still possible to take out single-trip insurance, as and when it is needed.
Adventure
Travel insurers recognize the recent huge growth in the numbers of people combining travel with adventure sports and activities. Whether this is skiing or snowboarding, other mountain sports, water sports or a myriad other forms of adventure, specialist insurance packages are available to cover the particular and peculiar needs of those who determined to mix action with their travel.
Cruising
Another explosion in holiday choices has been the growth in cruise ship travel. This also entails the need for cover that addresses the particular needs and concerns of cruise passengers, whatever their age.
Golfing
A sporting trip on which you are unlikely to run the same risk of injury as the adventurously inclined is a golf holiday. But, once again, there are particular needs and concerns that insurance packages can cover for the traveling golfer. Golf clubs and other equipment are valuable and need insuring, for example, whilst tailored packages can also cover the cancellation of expensive green fees or other bookings.
Backpackers
More and more students and many other young people are taking advantage of “gap years” and other extended holidays to see more of the world and spend longer overseas. Where standard holiday insurance is frequently limited to a maximum number of days that would fall short of the backpackers’ expectations, these specifically-designed insurance packages provide cheap cover for those planning to be away from home for up to a year or 18 months (depending on the insurer).
Age-related
Given that many travel insurance plans provide cover for up to a maximum of £10 million medical cover, the policy holder’s age and any pre-existing medical conditions need to be taken into account. These days, however, disabilities, special needs or pre-existing medical conditions need be no barrier to a holiday and securing the appropriate level of travel insurance. Neither is age any obstacle, since many companies will insure travelers up to 99 years of age, simply recognizing that the age of the policy holder will of course affect the level of risk insured and therefore arranging cover as appropriate for those aged up to 65 years, those 66 to 69, 70 to 75, and over 75.