It’s hard to turn on the TV or radio recently without hearing reference to the cost of living crisis.. and, for consumers, car insurance is the latest household bill to soar.

The Office for National Statistics (ONS) reported that the average price of car insurance rose 43.1% in the 12 months to June 2023, whilst some motorists with policies up for renewal were dismayed to find prices rocketing by as much as 70%.

Yet the Association of British Insurers quarterly motor insurance premium tracker tells a slightly less alarming story. The average price paid for motor insurance in the first three months of 2023 was £478 – only 16% higher than 2022. Whilst the latter half of the year is likely to see this rise, it’s still not as dramatic as the ONS suggests because the figures track different things. The ONS data is based on insurance quotes, whilst the ABI looks at the prices people actually pay for both new and renewed policies.

Why is motor insurance so expensive?
Naturally the same issues apply to commercial and fleet vehicle insurance but there seems to be no easy solution for insurers, whose own costs have risen as a result of a range of circumstances. Margins have been squeezed by the rise in the cost of second hand cars during the Covid pandemic, by higher wages across the car maintenance sector and especially by a shortage of spare parts, such as microchips and semiconductors. With global supply chains disrupted by the war in Ukraine and unease in China and the Middle East, not only are these more expensive but take longer to arrive, resulting in cars being out of action for longer following a claim, so claimants need courtesy cars for longer. Meanwhile electric cars are more expensive to repair than gas-driven vehicles.

High renewal quotes across the board highlight the importance of shopping around. As that differing data shows, whilst renewal quotes can be stratospheric, it’s possible to find insurance deals that are easier on your pocket, with the help of an independent broker like Cowens.

Making savings on insurance puts individuals and businesses at risk
An increase in premiums and a decrease in confidence isn’t restricted to vehicles. Forecasts suggest that falling household incomes and an uncertain housing market will lead more people to re-evaluate their finances across the board, potentially leading to reduced demand for home and contents insurance and to consumers potentially choosing to pause or reduce paying into protection cover such as life insurance. Yet it is vital that neither individuals nor businesses skimp on these essential indemnities.

Insurance offers security in a changing world
Fortunately whilst commercial property insurance has also seen a rise in premiums (for the 23rd consecutive quarter as reported by the Council of Insurance Agents & Brokers) there has been less of a corresponding shift in demand, with business owners prepared to pay for protection in the face of escalating property values and the risk of natural catastrophes. For businesses, large or small, change is accelerating possibly at a faster pace than at any time in history with shifts in climate, technology (not least AI) and customer expectations, combined with global and political volatility, encouraging enterprises to transform their infrastructure, products, business models and cultures in order to survive. Insurance has the potential to act as a safety net in the face of those changes, providing a backstop against innumerable risks. It is important to not only react to risks but implement processes and policies aimed at mitigating risk and preventing losses – again considerations best discussed with an expert broker.

Don’t skimp on cyber insurance
One area which is seeing rapid growth (but happily where premiums have seen less of an increase) is cyber protection. As businesses rely increasingly on digital data to maintain productivity and security and improve sales, it is vital that they protect themselves from undesirable events such as corrupted or lost data or criminal acts like data breaches. This is particularly true for businesses that store personal information about their clients. Unfortunately with growing investment in online presence and ecommerce activity there is commensurate growth in the number of cyber attacks on online businesses. Cyber criminals can steal your funds, impersonate your business and trick your employees into transferring funds or merchandise to them. A cyber attack can also cause physical damage to your business equipment, for example broken computers and malfunctioning servers, so UK businesses will need more and robust cyber liability insurance to ensure they are fully protected.

What can you do to reduce risk – and premiums?
The insurance industry finds itself in a hard market thanks to the knock-on effect of global natural disasters and the residual effect of the economic downturn. In that situation underwriters look more closely at losses, safety records and financials so it’s fundamental that businesses of all sizes are assured that risk management and safety programmes are reviewed and in place. Since many insurers also conduct credit checks it’s wise to pay invoices on time and keep your company’s financial records in order, to ensure you are not flagged as a risk.

Businesses (and individuals) should also start any renewal processes early – and shop around! By using a reliable independent insurance broker like Cowens to source a suitable and comprehensive package to suit your specific needs, you can ensure you are covered against potential losses – and look to the future with confidence. Find out more by contacting Cowens today.

The post As insurance premiums rise be sure to take the right advice from an independent broker appeared first on Cowens.

If you are looking for an insurance policy, you might believe that the use of a middle man is a hindrance and not a help. In this case, you turn to price comparison sites to look for the cheapest policy. This may not always be the best way, as some policies that you will be offered may be fairly generic. You could also be underinsured, which could compromise a claim process. So why use an insurance broker?

In this article, we will cover five reasons why using a broker might be the best choice.

1. Impartial and expert advice

Because insurance brokers are independent companies, they are not tied to any one insurer. They can offer impartial advice tailored to your personal and business needs. A chat with you is usually all they need to find a suitable policy from the insurers they work with. This means you get the right cover at the right premium. Also, you probably do not have the time to study the technicalities of, say, professional indemnity insurance. However, a lot of brokers have, and that makes them an expert. You benefit from that expertise when they speak to you about the cover you need. That same expertise extends to mid-term changes and queries, too, with the bonus of personal service in some cases. That is not always the case with large direct operations or comparison sites.

2. Cover

Insurers can only offer you one policy: theirs. This is often written for the mass market, and it will not be tailored to your specific needs. Multiple business activities, high-value property or exceptional contract requirements could mean you need something different. A broker recognises extraordinary requirements, identifies the cover you need, arranges it with a suitable insurer and ensures that your documents are correct. They will also tell you if you are already covered by your existing policies so you don’t overlap.  Certain insurances such as professional indemnity and public liability insurance can sometimes be complex; if you are unsure of where to start, asking an impartial expert could prove useful.

3. Cuts through the jargon

Insurance policies can be challenging to understand because covers are technically spelt out. Getting an insurance broker who understands the details and can explain each policy is a huge step into finding the right insurance. For example, if you are insuring your home or starting a new business venture, trying to understand terms like uberrimae fidei, subrogation and indemnity could be confusing. An insurance broker cuts through the professional jargon to determine which policy will protect your business and possessions. This means you can focus on decorating your home or making your business profitable.

4. Manages your claims

This is probably one of the best reasons to use a broker. When the worst happens, you need all the help that you can get. If you need to make a claim, a broker might speak to loss adjusters and the claims departments to ensure the process is hassle-free. Also, brokers understand the technicalities of your policy, therefore they can argue your case in the event of a disputed claim.

5. Know your options

Brokers can help point out the types of cover available and what cover you need. They also take the time to explain the fine print of your policy so you know what you are signing up for. Situations might change in future, and your insurance needs to reflect this. Brokers ensure that you continue to get the right cover at the right price.

The post Why Use an Insurance Broker? appeared first on Cowens.

Headlines over the past few years have been littered with stories of families losing out on thousands after having their household claims refused by online insurers. In one example, a family who was on holiday in Singapore found out via Facebook that their house had suffered a major fire. On returning to England, they were shocked even further to discover that their claim was to be refused, leaving them with a £460k bill.

The insurers turned down the claim on the basis that the house had seven bedrooms and not five (which the family had declared) – and the whole case came down to the family unknowingly filling out their online form incorrectly. Without the expert help or knowledge of an insurance broker, it has become too easy to tick a box without knowing the consequences, which could put a family at huge risk of losing out.

In another recent case, a family’s belongings were destroyed after a huge fire at the storage unit they were being kept at. Although their online insurance provider was aware of the family’s home renovation plans, the mother did not notify the company that their possessions were being kept outside of the home. This was partly due to a stressful family situation at the time and partly because she was unaware that notifying them was an essential term of the policy. Their claim was rejected and although after intense media attention the firm has agreed to payout, the scenario has caused months of heartache and stress for the family.

In light of this case and many others like it, after a full investigation, it has since been found that different online insurers have a range of varying terms on keeping possessions off-site. In fact, each online insurer will have different terms when it comes to other stipulations such as locking windows from the inside and declaring small unused rooms as bedrooms as well – all which could have a significant effect on the result of a claim.

One thing is clear, cutting out the middle man can reduce costs but can also mean cutting out the duty of care. As insurance brokers, we have a high level of responsibility and care to ensure all clients are provided with the most concrete policies possible. The most important part of this is going through insurance policies with a fine-tooth comb to protect each client against any nasty surprises. Knowledge is power after all – and knowing exactly how to protect your home and what you must declare to your insurer is key. That way, if the worst were to happen to your home, you can feel safe and confident in the cover that is in place.

An expert eye on your policies could mean the difference between receiving a pay-out and losing hundreds of thousands. If you need help to clarify the terms of your household insurance or are unsure on where to start when covering your home and possessions, our expert Private Client team can help by providing bespoke packages tailored to your needs. Get in touch on info@cowensgroup.co.uk or call 01623649931

The post The Importance of An Expert Eye appeared first on Cowens.

Home

Unspecified Personal Possessions

Often an optional extra, this term covers personal possessions carried outside the home, for example watches, laptops and handbags. Items are usually limited to the value of £1,500 or £2,000 each and cover protects them from accidental damage, loss, theft etc anywhere in the UK and usually for up to 60 days worldwide. Cover is usually in bands of £1,000 starting at a minimum £2,000. The term ‘unspecified’ is key! Don’t assume all of your carried items are included in this – if you have something more expensive than the single item limit that you often take outside of the home, you will need to declare and specify it to your insurer.

Accidental Damage

Many people are under the misconception that they have full accidental damage cover – protecting all their household items, fixtures and fittings for cosmetic damage including chips, marks, spills and rips. However, the majority of standard policies only have a small element of accidental damage automatically included for damage to fixed glass, sanitary ware and non-portable TV/Video/Hi Fi equipment. It is important to remember that this is NOT Extended Accidental Damage and will not cover spills on carpets, rips in sofas, damage to kitchen fixture and fittings e.g. hot saucepan melts the worktop or that red wine stain from your most recent house party!

Bedroom Rated

Most home insurance policies are commonly bedroom rated, which means you get automatic cover limits of typically £1 million for the building and up to £75,000 for contents. The premium increases with the more bedrooms you have. This works on the basis that a one bed is going to be a much smaller property than a five bed with less contents to insure. Many people lose out in the event of a large household claim such as a fire or theft by not declaring the number of bedrooms correctly when taking out their insurance policy. It is important to note that the number of bedrooms declared should be the number of bedrooms the property was built with, or extended to have, or the number of rooms in the house used as bedrooms; whichever is greater. This may push your premium up slightly when taking out or renewing your policy but could save you thousands if you ever have to make a claim, as any discrepancies on your bedroom declaration could result in an insurer refusing to pay out.

Travel 

Proximate Cause – Medical Declarations

When looking at those long forms for travel insurance, it is important that you are able to agree with ALL aspects of the medical declaration. This applies when you take out the insurance and, for annual policies, each time you travel. If you can’t agree with every ‘tick box’ on the declaration because of a medical condition or recent visit to hospital, you need to disclose ALL pre-existing medical conditions. This is very important due to ‘proximate cause’. E.g., if you faint due to a pre-existing blood pressure issue whilst away and break a bone due to the fall, you would not be covered for the broken bone if the blood pressure problem was not declared. In this case, the claim would be turned down.

Car

Driving Other Cars

People often believe that this term on their car insurance enables them to drive any other car not belonging to them or leased to them and be fully insured. Sadly, this is not the case and there are a few key points to remember. Firstly, car means car only – not vans! This term also only applies to the policyholder if aged over 25, no one else named on the policy. It is intended to give emergency cover only, as the car you are driving will not be insured for damage if you have an accident that is your fault or if you are unable to claim off the person to blame.

Insurance may seem confusing, but it is our job to cut through the jargon to help people feel safe and secure with their policies. If you have any questions regarding an existing policy or are looking for new personal or business cover, get in touch with one of our experts today. As brokers, we will go through your insurance with a fine-tooth comb to greatly reduce the risk of you losing out. Get in touch on info@cowensgroup.co.uk or 01623649931.

The post Cowens Jargon Buster- For home, car and travel appeared first on Cowens.