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Home shopping sales targeted

The Competition Commission has ordered a clampdown on the sale of payment protection insurance (PPI) by home-shopping outlets and catalogues.  

The regulator is concerned that people who buy furniture, clothes and electrical items on credit – such as "buy now, pay later" or "pay nothing for a year" deals – are being sold inappropriate and expensive insurance.

The commission said there was little competition between providers on price and other factors, limited ability for customers to search for alternatives or switch products and a considerable point-of-sale advantage for the providers.

PPI policies are plans that claim to cover people with debts in the event of accident, unemployment or sickness. They have long come under fire for being mis-sold by pushy shop assistants and bank advisers and have been subject to investigations by the Office of Fair Trading and the Financial Services Authority.

This week Alliance & Leicester was fined £7m for what the FSA called the "most serious mis-selling" of PPI. The bank did not make it clear that the insurance was optional and trained its staff to put pressure on customers when they queried the inclusion of PPI in their quotations, the FSA said. In January HFC Bank, a lender owned by HSBC, was fined a record £1.09m by the Financial Services Authority for failing to treat customers fairly when selling PPI.  

Home insurance from eHome Insurance

Legal & General Q3 revenues down

UK-based insurer Legal & General Group has reported that its revenues for the third quarter of 2008 declined 1.5% to GBP331 million from GBP336 million posted in the same quarter of 2007.

 Sales for the first nine months ended September 30, 2008 increased 5% to GBP1.14 billion, as compared to GBP1.09 billion reported for the first nine months ended September 30, 2007.Tim Breedon, group CEO, said: "These results once again underline the strength of our broad distribution model, high quality product offering and robust financial position. We remain at best cautious about the economic outlook for the UK, but are confident that we are well positioned to exploit opportunities throughout the current economic cycle."
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Doncaster top of the league for burglaries as crime rates look poised to rise

Threat of increased insurance premiums hangs over high-theft postcodes

Doncaster and Bristol residents are more likely to have their homes burgled than people living anywhere else in the UK, price-comparison site Moneysupermarket.com has revealed in a list of the top 20 burglary-prone areas.

Almost 6 per cent of homes in both areas have made claims on their household insurance for thefts over the past year. Other areas that made the unlucky list include Nottingham, Birmingham, Sheffield and Reading. And London, with its high crime rates, contains seven of the country's 20 top burglary postcodes.

But Doncaster and Bristol, which took first and second position respectively, come as a surprise to Peter Gerrard, the head of insurance research at Moneysupermaket.com. "It proves any area, regardless of reputation, can be classed as high-risk," he said. "Unfortunately, seeing your postcode in the list could be reflected in your insurance premiums, with insurers blacklisting whole cities or areas as high-risk." And as winter sets in, the longer nights may provide more opportunities for thieves, warns Mr Gerrard.

Checking that your insurance policy is up to date is recommended, especially as crime is likely to rise during the economic downturn.

Speeding fines and car insurance

If you're caught speeding on today's roads, it's not just the fine that'll hurt your wallet. You may also find that the cost of your car insurance goes through the roof. According to research by the AA, average drivers, with penalty points on their driving licences, may have to pay as much as 20% more on their car insurance premiums, even if it's a first offence.

The research suggested that premiums for a 25-year-old would increase by an average of £42 after one driving offence and by as much as £178 after two offences. A 40-year-old woman, meanwhile, could expect to see an average rise of £28 after one offence and £116 after two

Lottery for increased premiums


While some insurers may not penalise those with just three penalty points on their licenses, others take a much tougher line, considerably raising the costs of insurance cover for anyone found speeding.

A spokeswoman for Esure, for instance, recently told The Guardian that analysis of more than 750,000 customers had shown that those who had committed a speeding offence in the last 12 months were 12% more likely to make a claim in the next year - sufficient foundation, it seems, for some insurers to charge such customers extra.

Easy to catch out


And for those who think they can speed and not get caught, there's also bad news.

There have never been so many sophisticated cameras working on our roads in the UK, with 36 safety camera partnerships operating cameras at 6,000 sites across Britain. It's no surprise then that fines have also soared in recent years, with around two million drivers a year caught by speed cameras and fined. In addition, with new developments in speed camera technology, the likelihood of getting caught if you speed is getting higher.

Fortis failure would leave motorists at risk Millions of motorists risk driving uninsured if the British arm of the stricken European bank, Fortis, fails. 

Fortis is the third largest provider of private motor insurance in Britain, accounting for 15 per cent of the market – or more than 1.6 million cars. It sells millions of policies through high street and internet insurance brokers.

The company also provides policies for high street chains to sell under their own brands, including John Lewis, Kwik-Fit, Age Concern, the Post Office, the AA and the Alliance and Leicester.

The UK branch of Fortis believes it will not be affected by the plight of its European parent which has had to be bailed out by the Dutch, Belgian and Luxembourg governments - with finance minsters agreeing an £8.9 billion package to rescue the bank. However, the turmoil has highlighted the vulnerability of motorists in a system where banks and insurance companies are interlinked.

If an insurance company fails, the Government provides a measure of protection through its Financial Services Compensation Scheme.

But it has emerged that the protection it provides is limited, leaving motorists vulnerable to not only finding out they have no insurance cover, but that they are also driving illegally as a result.

Should an insurer fail, the scheme will honour any claims that were in the pipeline at the time of the company's collapse. But it will not indemnify motorists against any claims made from the moment an insurer ceases operating. Even though the scheme would refund any premiums, it would be the motorist's responsibility to find alternative cover.

Some industry analysts also believe that the difficult financial climate could push premiums up – even though the motor industry market is fiercely competitive. "It has been difficult for insurers to make a healthy profit," said a spokesman for the British Insurance Brokers Association. "Premiums have been low for some time, if you take a major player out of the market, then they could go up."

The UK operation of Fortis sought yesterday to reassure policy holders by insisting that it was carrying on "business as usual" It also stressed that it was a "separate legal entity" from its continental parent, which is currently dependent on a multi-national rescue package. "We are very secure and profitable in the UK," a spokesman added.

 
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