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Consumer - How the recession effects your insurance

Thursday, 1 October 2009

Tina looks at home, motor and health insurance and what we should be checking in each policy.
Tina also gives us some prices to show how small changes in your policy details can effect the overall quote.

According to figures released by the Financial Regulator last week, the insurance industry's income is down 22% and their profits are down 83%.

It is a sign that in these straightened times consumers are switching to better and cheaper deals, or they are not renewing policies.

House rebuild costs are down 4 to 5% across the country according to The Society of Chartered Surveyors

The biggest decreases were seen in Dublin where falls of €90 - €100 per square metre were recorded.

Who is the Guest?

Tina Leonard, our consumer expert

What the newspapers say:

"Insurance premiums rise sharply with further rises likely"
The Sunday Business Post 20th September

"Irish insurance profits plummet as premium income falls €10bn"
The Independent 24th September

Introduction
If you want to save money on your motor, home or health insurance then you need to review your existing policies so here's what to do.

Home

Take out your policy and check the following:

a) What is the re-build cost indicated?
Remember you are not insured for market value but for re-build costs. These re-build costs will have come down in the last couple of years, so you may need to adjust this. If you are over insured, you will be paying a higher premium but if you need to claim you won't get any more than the actual loss, so it would be a waste of money.

You can check out current rebuilding costs from the Society of Chartered Surveyors at www.scs.ie

b) Have you overstated the value of your contents?
The replacement cost of everything from cutlery to a computer from the contents of your garage shed to the carpets and curtains, should be included. You can also specify certain valuable items separately such as jewellery or antiques. Add the replacement cost of everything again to make sure the value indicated in your policy isn't too high.


c) Any positive change to your house or the area?
Since you last updated your home insurance have you added locks to windows, extra some alarms or got a new burglary alarm? Is there a new neighbourhood watch scheme?
All of these factors could bring the cost of your insurance down so let your policy provider know of any changes.


Examples:
1. Detached house in Birr, Co Offaly. Rebuild €150,000, contents €50,000, yes to smokers, no to a burglary alarm. Quote = €451.53


2. Same house, rebuild and contents same but no smokers and yes to burglary alarm. Quote = €371.19


3. Same house, rebuild €120,000, contents €35,000, no smokers, standard burglary alarm. Quote = €303.44


All quotes from www.quotedevil.ie


Motor

Take out your motor insurance policy and check the following:

a)What value is given to your car?
If you bought the car several years ago for €10,000, and that's the value you gave in the initial insurance policy, then you need to check that this value has decreased each year.
The car may only be worth €3,000 now so make sure you're not paying a higher premium for more.

b)What type of cover do you want and need?
The cost of your cover will depend on the level of cover you choose i.e. third party fire & theft costs more than third party cover only, so think about how often you use your car, for what purpose and if anyone else uses it.


c) Do you have a full licence?
Whether you have a full or provisional licence will also affect cost as will your age and gender, how many years you have been driving and if you have driving convictions or penalty points. So get a full licence and drive carefully.


d)Has where you (and your car) live changed?
If you have moved house and now have a garage or private driveway for the car, or if the area you now live in has neighbourhood watch or a garda station nearby etc, tell your insurer as these factors may bring down the price of your premium.


Examples:
1. 35 yr old female, with 1.4lt car and 5 years no claims bonus. Car worth €10,000. Quote: Comprehensive = €392.57, third party fire and theft = €337.98, third party = €195.14.


2. Same woman and car but value at €3,000. Quotes: Comp = €361.90; third party fire and theft = €296.14; third party = €195.14


All quotes from FBD motor insurance.


Health

Health insurance premiums already rose this year thanks to the government levy of €160 for adults and €53 for children imposed on each premium from January this year. But costs are set to rise again. Hibernian Aviva are increasing their prices by 12% from 10th October and it is expected that both VHI and Quinn will increase theirs by up to 20% from next January. So it's time to look for a better deal and to switch now before costs rise.

In some case switching at the same level of cover can save you money anyway, but other people are saving by reducing the level of cover. If you are switching this remember:

. If you switch health insurers to a policy with a similar level of cover, while being treated for an illness, your cover will not be affected.
. If you are upgrading your cover, a waiting period may apply before any new additional benefits kick in.
. If you downgrade the level of your cover, if you want to upgrade again in the future a waiting period may apply.

Many are foregoing private health insurance too, in an effort to cut back on expenditure. The public healthcare system is there for you, but if you ever want to get private health cover again bear in mind the following:

. You should not leave a gap in cover of more than 13 weeks. Otherwise, you will be starting off again, and a waiting period will apply.
. The maximum waiting periods are 26 weeks if you are under the age of 55 years, 52 weeks if you are aged 55 and under age 65 and 104 weeks if you are aged 65 or over. However, you will be covered in the event of an accident or injury that occurs while you wait for full cover.

Examples:

Family of two adults and two children under 18:
- Quinn Family Care €1,980
- VHI Family Plan Plus (level 1) €2,144
- Hibernian Aviva We Level 2 €1,948.80 (will increase by 12% from 10th Oct).)

Tina Leonard
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