Malcolm Kyle

Express.co.uk ~ Wednesday November 24,2010

By: Esther Shaw

CONSUMERS are being warned they could be putting themselves at financial risk by cutting back on cover that protects them in the event of fire, flood, theft or accident.

The warning has come from the British Insurance Brokers’ Association (Biba) after its findings showed that 57 per cent of brokers have seen consumers reduce their level of insurance protection during the economic downturn compared with 23 per cent last year.

“The steep rise in people cutting cover is very worrying,” said Eric Galbraith, chief executive of Biba. “We understand that times are tough but consumers should take care not to leave themselves exposed. It could be false economy and cost them thousands of pounds for repairs or to replace belongings.”

The most common examples were consumers reducing levels of sums insured, for example on home insurance, increasing excesses and scrapping cover that is deemed “non-essential”.

“Reducing your sums insured could be a costly mistake as if it isn’t accurate, it could adversely affect a claim payment,” said Galbraith. “Customers also need to ensure they will be able to afford higher excesses should the unexpected happen. The key is to think long and hard about the cover you need to meet the financial consequences.”

The good news is there are other steps you can take to keep a lid on costs.

Homeowners who want to cut the cost of cover can potentially save money by buying their buildings and contents cover from the same insurer and installing a burglar alarm. Motorists can save money by investing in an alarm or immobiliser and by parking in a garage. Travellers may also be able to cut costs by purchasing an annual multi-trip policy rather than a single-trip one.

More savings can be made by paying premiums upfront, as most insurers charge interest on monthly payments.

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By Melanie Wright

Daily Mirror 27th September 2010

With the recession hanging over us and the Government making savage spending cuts, the spectre of unemployment is a very real one.

But how would you cope if the worst happened and you lost your job?

More than 1.25million private sector jobs have been lost over the last two years, according to the Trades Union Congress. And that’s before the 10 per cent cut in public sector jobs the Office for Budget Responsibility says is to come.

There’s no getting away from the fact that losing your job means serious financial consequences. But there are things you can do to ease the pain.

First, everyone should have a savings buffer in place. Putting a little bit away each month will help tide you over. If you haven’t used your tax-free ISA allowance for the year (up to £5,100 in a cash ISA), this is the best place to start.

Second, you should consider taking out unemployment insurance.

One of the most common forms is accident, sickness and unemployment cover, which pays out for up to 12 months. But bear in mind the premiums on this type of insurance have been rising steadily as more and more people lose their jobs.

And some providers no longer provide cover to those they consider at high risk, such as civil servants and local council workers.

Cover costs from between £3 to £8 a month per £100 of benefit. So, if you want cover of £1,000 a month, this will cost anything from £30 upwards.

Once you make a claim there will usually be an “excess period” of between 30 and 90 days before the policy starts paying out.

And most plans also offer “back to day one” cover, meaning that when your policy does kick in, it will backdate payment to the day you had to stop working.

Remember that policies generally won’t pay out within the first three months of you taking them out.

If the worst happens and you do lose your job, set yourself a strict budget so you don’t go into debt.

Also make sure you claim any benefits you might be entitled to, such as Jobseekers’ Allowance.

But remember that if you have savings it might affect your benefit payments. You get less if you have savings over £6,000, and if you have more than £16,000, you probably won’t qualify at all.

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