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.
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Legal & General Q3 revenues downUK-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. |
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Buildings Insurance covers loss or damage to the structure of your home, the building itself. Contents Insurance (see below) covers your possessions. How much cover do I need? The amount of insurance you arrange should be enough to cover the total cost of rebuilding your premises. The rebuilding cost of a building is not the same as its market value. Depending upon the type of property the rebuilding cost could be more or less than the property valuation. Your Insurance Company will provide a conversion table to estimate the rebuilding costs and give you an idea of the level of insurance you require. You could also pay a surveyor to carry out a rebuilding estimate survey for you. If your property is very valuable or is a listed building it is almost certainly worth obtaining a professional valuation first. Insurance companies usually index-link the level of cover year on year so that the amount of cover offered by the policy keeps up with inflation. The level of insurance cover will change each year, so it is wise to fully review your policy every 2 or 3 years to ensure that the cover remains adequate for your needs. What does the Insurance policy protect?If your house is destroyed or rendered uninhabitable, you can claim the cost to rebuild or carry out the necessary repairs. Your insurance cover should provide you with alternative accommodation whilst the rebuilding work is carried out. You can make smaller claims on your policy for damage caused by less destructive events such as floods, fire or smoke damage, or even broken windows. Other areas that may be covered are:
Buildings Insurance and Mortgages Most mortgage lenders require you to take out a Buildings Insurance policy to protect the building from damage. Many lenders offer their own insurance policy at the time you take out the mortgage, but you are under no obligation to buy your insurance from them. There is no guarantee that they offer the cheapest rates so you should always consider finding a cheaper alternative. You should always make sure that there is proper insurance in place from the point that you first become responsible for the premises - even before moving in. Contents Insurance Contents Insurance gives protection on your personal possessions whether they are at home, in the car or during a move. Contents Insurance is often combined with Building insurance. Contents insurance covers both the total loss of your possessions or their damage caused by:
What different types are there? There are two main types of policy:
Other differences relate to the replacement value of each item. The commonest type of policy will give you a cash payment equalling the price of buying an identical new copy of the item. In the second type, the insurance company itself will buy and replace the item. In the third type, the insurance company will give you cash equalling what they judge to be the second-hand value of the item. These policies are known as "indemnity policies" and are useful for reducing your premium costs if you live in a high risk area. Differences will also be particular to each policy, for example:
What should I think about when choosing a policy? Decide if you want to calculate the value of your possessions yourself or if you will accept a "one price fits all" solution from your insurer. Check the details of policies and see which best suits your circumstances. For example if someone is at home most of the time, you can find policies offering a discount. Certain types of burglar alarms can also reduce premiums. Consider paying your premium annually to benefit from any discount.
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