Insurance Costs and Compensation Payouts Skyrocket to create a Longer Recession

NCD News: Insurance Costs and Compensation Payouts Skyrocket to create a Longer Recession - 25.01.10

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Insurance Costs and Compensation Payouts Skyrocket to create a Longer Recession: >>>> A survey from the AA has shown that 19% of the 20,000 people questioned knew someone who had driven when they were to ill to do so. Just 2% of people admitted to doing so themselves. The results follow a government report which revealed that doctors and those in the healthcare profession have problems when dealing with people who are too ill to drive. Edmund King from the AA commented that the figures indicate that 6m people could be driving when they are aware they should not be. He goes on to say that employers should be vigilant about staff who may have had licenses revoked due to illness.

Figures due from the AA this month are expected to show that insurance costs for young people have increased by 14% in just the last three months. The costs for parents who put their children on their policies has also increased, In fact, the overall cost of motor insurance has increased by 11%. It is unusual for a male driver who has just passed his test to get a quote of less that £3,500 a year and many insurers are refusing to insure young people at all. The increase is being put down to larger than usual liability insurance payouts due to young people driving with, and then injuring, groups of friends.

Meanwhile results from the Consumer Intelligence survey have indicated that insurance is set to rise by 15% this year on top of the 20% rises of last year. Once again, personal injury claims are behind the huge increases. The survey showed that the average premium is £564, almost 20% higher than this time last year. Motor insurance policy holders pay around £30 each for the 1.6m uninsured drivers on our roads. The highest increases have been for young people and the lowest are for those aged over 65. Premiums for men rose more than those for women. The managing director of Consumer Intelligence stated that price comparison sites had been successful at keeping prices down, but that effect appears to have been overtaken by pricing pressures.

>>>> Annie McVey whose daughter Claire died of VCJD, the human form of BSE, in 2000 is challenging the Government's compensation scheme and says it is too complicated. The scheme was set up in 2002 and £67.5m was put aside for the first 250 claimants. This would be reviewed if the numbers rose. A trust was put in place to manage the funds, but this turned out to cost millions in legal fees and there have been long delays. Mrs McVey has said that her family was expected to fill out forms detailing the care they offered their daughter and the times this was carried out and how much they paid in hospital trips. They also had to provide evidence for these costs. They found this overwhelming. Despite the trustees of the fund requesting changes from the Health Secretary, these have been turned down. Mrs McVey says that while her own claim has been settled, she wants to ensure the process is easier for other claimants.

>>>> A delivery driver from Cardiff has won £3,300 compensation after claiming his female boss bullied him. Alex Frowd received the money for unfair dismissal after it was found that his boss had told the truth about Mr Frowd not working, but parking his van near the office. However correct procedure was not followed when he was sacked. Mr Frowd had claimed he was scared of his boss.

>>>> A 58 year-old female teacher from Glasgow has been denied compensation from Glasgow City Council after she was punched in the face when trying to breakup a playground fight. While the punch was accidental, the teacher did require dental treatment and was injured. The Scottish Secondary Teacher's Association has subsequently warned it's members not to get involved in playground fights without thinking carefully. They have also said they may mount a case of their own to get compensation for the teacher. The Council has said they had not been negligent and that the injury was sustained during the normal course of her duties. She was also told that she would not be supported financially when she had to have follow up surgery.

>>>> Speaking at a Conservative Manifesto Conference, the CEO of AXA Nicholas Moreau, commented that the cost of providing free healthcare in the UK could spiral out of control. He stated that with an ageing population and new and expensive treatments, the Government may need to choose between an NHS with defined treatments and what needs to be offered as "top ups" for those who can afford to do so. He pointed out that the private sector can offer many ways to help and to encourage personal responsibility to correct the current fiscal deficit.

>>>> Aviva will be making 40 staff members redundant by the end of 2012 due to the cancellation of an administration contract with Lloyds. Staff who handle the Halifax life and pensions funds based in York will be those who will lose their jobs. This news follows on from last weeks announcement that Aviva will be losing 585 staff members after changes to the wholesale and retail divisions.

>>>> Research from wedding insurance specialist, Ecclesiastical have revelaed that the first two months of the year are the least popular for weddings with just 1.7% taking place in January. The insurer doesn't just blame the bad weather, but the fact that finances are often at their worst just after Christmas. The insurer has also found that February, November, March and December are also slow months for their wedding insurance business.

>>>> Today being January 25 has been dubbed "Blue Monday". No not the New Order song, but it is claimed that today is the most depressing day of the year due to debt levels, weather, failed New Year resolutions and low motivation. In response the Green Insurance Company is urging customer to go Green rather than Blue by buying insurance which offsets 100% of it's customers emissions. They are also offering a 10% discount for today only. They say they will be planting 120,000 trees in 2010 and they hope that having a positive impact on the environment might improve the day.

>>>> The rising costs of keeping horses and ponies have meant that the 1.3 million horse owners in the UK have faced tough choices in the last year. Despite this, the market in equine insurance has not seen a decrease as owners are aware of the importance of the insurance. A spokesperson from NFU Mutual, the largest UK equine insurance provider has said that if people are making cutbacks it appears to be in other areas of their lives, not their equine insurance. Petplan agree and state that horse owners are very much aware that horse vet bills can be very expensive. A typical insurance premium would be around £42 a month, which would offer cover for a horse valued at £3500.

>>>> The ABI has increased its estimates of the costs of the Cumbrian floods last November. They say that 60% of the costs came from business damage and that amounts between £250 and £400,000 had been paid out in interim payments. They also say that 470 people remain in temporary housing. Nick Starling pointed out that it can take months for properties to be able to be lived in again. He also says that businesses should be aware of the need for continuity insurance to get their business up and running as soon as possible. He has also said that the Flood and Water Management Bill needs to be implemented sooner rather than later.

>>>> The FSA has announced it is investigating two insurance businesses and has frozen the assets of a third, after it criticised the segregation of customers money across the industry. Compulsory rules require that client funds are held in legally separate bank accounts. The FSA have said that poor management and record keeping was behind the problems. They have sent a letter to the Chief Executives of all major insurance firms to point out that the FSA will be taking action where their regulations have not been complied with and that supervision will continue if they believe clients money is not being looked after correctly. †