The Government and Insurers seem to Love Handing out Compensation

NCD News: The Government and Insurers seem to Love Handing out Compensation - 20.01.10

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The Government and Insurers seem to Love Handing out Compensation: >>>> The Government has announced a new scheme to compensate victims of terrorism attacks abroad. It will apply to those who are not covered by any scheme available in the country where the attack took place. Those who have been victims since 2002 will be able to apply for the compensation retrospectively. Jack Straw commented that it is right that victims are treated with sympathy and recognise the injuries suffered. The amount offered will depend on the severity of the injury or loss. The announcement will become part of the Crime and Security Bill which is currently going through parliament. Details will be announced shortly.

Whilst this ruling means that tax-payers who choose to holiday in safe countries, or not at all, will be paying for the injuries of holidaymakers who choose war-torn parts of the world to visit - there is unlikely to be an increase in travels to dangerous places such as Israel or Egypt in an attempt to get injured and claim compensation. Faking a pavement trip is still the safest way to commit compensation fraud and fraudsters will likely stick to those methods.

Meanwhile, Home Secretary Alan Johnson, has said he will fight a ruling which will allow compensation to be paid to two terror suspects whose "control orders" were overturned. The two suspects were under house arrest and had curfews and bans on the use of mobile phones. Despite the courts agreeing to the control orders, they were overturned after the home secretary was ordered to reveal the evidence behind the control orders. He refused to do so and the control orders were revoked. The suspects now have the right to ask for compensation.

>>>> More Than Travel Insurance is urging their customers to take care on the slopes this year after it emerged that many holidaymakers are skiing at twice the legal alcohol limit for driving. 568,000 people from the UK will have 7 units of alcohol in their bloodstream during a ski session the morning after a big night and will be travelling at speeds in excess of 20mph. 74% of those questioned said they did not think that drinking the night before would affect their performance, despite the fact they would not fully sober up until 11am. More Than point out that, like most travel insurers they are unlikely to pay out for accidents which occur while a person is intoxicated.

>>>> An assistant head teacher from Bramshall who was dismissed over a dispute, has been awarded nearly £15,000 in compensation. The award had been nearly double this amount but was reduced after it emerged that Michael Oldham had contributed to his own dismissal. The teacher had worked as both an assistant head and a science teacher and had been dismissed for failing to carry out school guidelines in the teaching of applied science. It was claimed that he failed to keep other teachers informed and would not cooperate. In his defence he said he had taken over the job from someone else and despite the problems, the results were good. The judge agreed he had been unfairly dismissed. Mr Oldham refused the offer of his old job back.

>>>> Further to the announcement by Zurich that they expect to increase their motor premiums by 20%, other insurers have been pointing out the reasons why they expect to increase their insurance premiums in 2010. The AA says that personal injury claims are likely to increase the cost of insurance this year. During 2008, 430,000 people claimed for whiplash and compensation of £1.9bn was paid. Fraud costs also increased by 17% pushing up the cost of cover. Confused.com have also commented that the substantial increase does not come as a surprise. They also blame the increase in personal injury claims. They advise shopping round for insurance in the future.

>>>> Justice Secretary Jack Straw has announced today that the success fees of no win no fee lawyers should be cut from 100% to just 10%. The announcement was made as part of a drive to ensure that costs in publications proceedings are more reasonable. The huge costs of litigation have been compounded by the fact that the winners can claim the cost of their After The Event (ATE) insurance taken out to cover themselves if they lose. The effect of this has been a drop in the amount of investigative journalism due to fear of being sued. Mr Straw commented that freedom of expression is fundamental to democracy and that the costs awarded in these types of cases needs to be reconsidered.

>>>> The possibility of strike action by BA staff for Easter was announced yesterday and travellers are being warned that they may not be covered by their insurance. For those who booked their holidays before yesterdays announcement, insurance is likely to cover any strike action, but anything booked from yesterday onwards probably will not be covered. Stuart Bensusan of Essential Travel warned that 350,000 of the 500,000 travel insurance policies taken out by their customers last year were taken just 8 days prior to travel. This leaves travellers vulnerable to last minute cancellations and delays. However it is worth noting that 99% of planned strikes do not happen.

>>>> Abbey for Intermediaries has announced a number of changes to its Additions home insurance range to encourage cross selling of insurance products by intermediaries. The premiums have been reduced by 17% and Aviva, Zurich and Groupama will oversee the range. Add ons will also be available on the Bedroom Plus and New Build policies. Research by Abbey has shown that as many as 4 out of 5 people do not take out insurance when arranging a mortgage through a broker, despite the fact it is a good source of income for the broker to exploit.

>>>> Mark Hazlewood of the Hertfordshire based insurer Synergys Ethical has been banned by the FSA for failing to pass on £360,000 in premiums. He also failed to pass on a further £25,000 as director of another business, Aquote. Synergys had arranged insurance for doctors who employed locums or temporary staff. The problems came to the attention of the FSA when people who had tried to make a claim had received no payment. Mr Hazlewood ignored requests for information and failed to contact any of his customers. He is now the subject of a fraud enquiry by the Hertfordhsire Police Fraud Squad, who are searching for him in Asia where he is believed to be at this time. The FSA said that it was clear that Mr Hazlewood had no intention of ever declaring the money he received and that this type of behaviour was not tolerated by the FSA. Which is hard to believe as people are losing their savings whilst bankers get their hefty bonuses ... the FSA seem to tolerate quite a lot - which is why Mr Hazlewood is probably doing fine in Asia with other people's £400,000.

>>>> Research conducted by Professor Merlin Stone at the Oxford Brookes University has shown that insurance is the area of finance where people are most likely to switch. Bad customer service was cited by over one fifth of those who changed. Professor Stone stated that the increased rate of changing is likely to have come from a change in people's expectations and the emergence of comparison sites. In the last 2 years, 15m people have changed their motor insurer and 14m have switched their home insurance provider.

>>>> Wiltshire Fire and Rescue Service have issued a warning to people who may be releasing Chinese lanterns to take care as they could be a problem for thatched houses or crops. They say that there is no guarantee that the lantern will have extinguished when it lands and there is no control over where it might drift. The NFU has also expressed concern over the use of the lanterns, as they could set fire to crops or even get eaten by animals. Wiltshire council has suggested that people organising events where lanterns might be used should carefully check their insurance to ensure they are covered if any damage occurs.

>>>> Gocompare.com has issued a warning to their customers that they may not be adequately covered by their car insurance if they use their car for business purposes. They have found that 72% of UK workers have used their own car for business use in the last year and only 35% have cover specifically for this. 5% of those questioned said they did have a company car for business use but it was withdrawn due to the recession. While standard insurance covers people for driving to and from work, business use requires additional cover. Lee Griffen of Gocompare suggests that employers need to take responsibility to ensure vehicles used for business have proper insurance in place and employees should check with their insurer before using their car for business purposes, regardless of how infrequently this might happen.

>>>> Directline and Brake have released the results of research which shows that 84% of car and van drivers did not know the percentage of wear on their brake pads from their most recent service. 73% had their brakes checked only at the time of their service. A spokesperson from Brake said that drivers rely too heavily on their MOT to pick up problems with brakes, where they ought to see safety of their vehicle as a constant concern.

>>>> Data from market analyst Mintel, has shown that comparison sites spent £85m on advertising in 2009 compared to just £35m in 2006. 80% of this advertising is spent on television. Most of this money is spent by the top three: Confused.com, Moneysupermarket.com and Gocompare.com. All three are Welsh companies and are contributing to the income of Wales significantly. 24 million people have used a comparison site to purchase financial products or to obtain a quote. The meerkat advertisements from Comparethemarket.com have allowed the site to gain an 11% share of the market, coming close to Gocompare at 15% and Confused.com at 16%. Moneysupermarket.com has a 38% share of the market and has recruited Peter Jones and Omid Djialili to front it's campaign. Ian Milner of ad agency Iris, points out that comparison sites have no high street presence and rely on advertising to increase their customer base. †