‘Featured’ News

Credit Crunch Likely to Impact on Car Insurance

Posted 2008-04-29

Fears that the current credit crunch will have a considerable affect on the car and van insurance industry, as mortgage borrowers and secured loan borrowers begin to feel the financial squeeze, may be borne out by recent statistics published on the Independent price comparison website MoneyExpert.com, which discovered that in the last 12 months around 350,000 car and van drivers took vehicles onto UK roads without any insurance cover whatsoever.

At the very minimum, the law demands that motorists must have third party insurance cover, in order to meet the costs of medical care and personal liability should they be involved in a serious accident.

MoneyExpert.com spokesman Sean Gardner insisted that cost could never be considered an adequate excuse for failing to take up an essential insurance policy.

He commented: “It’s a real worry that so many people persist in driving without insurance. They are putting the personal and financial security of others at risk.”

There are also indications that failing to secure an adequate insurance policy is not the only crime some motorists may be guilty of committing.

According to the Essex Echo newspaper, police in the county have recently noted that a series of registration number plate thefts could be attributed to criminals simply intending to avoid the payment of car insurance and road tax.

It is understandable that during the present financial climate even the most law-abiding members of the public may be driven to extremes, particularly those with secured property or secured loans, who may now be finding that the usual avenues of refinancing are becoming closed to them because of new strictures being imposed on lending criteria by secured loan, mortgage and remortgage companies.

It is perhaps surprising then, according to a report recently published by Chiltern Debt Management, that for the first time ever the average level of debt of a consumer on an informal debt management plan has dipped below the £26,000 mark.

The organisation’s Debt Monitor also revealed that the average of total debt has decreased by around £400 since the start of the new year. This, the analysts claim, is proof that consumers are managing indebtedness much better by preventing debts from escalating, as had previously been the trend.

Acknowledging that credit is becoming much more difficult to secure during the current financial climate, with tighter limits being applied to credit cards – it is estimated that in the region of 60% of Britain’s £25billion of problem debt is on cards — and very much reduced mortgage options available, a spokesman for Chiltern, Nathan Gladwell, commented that the present crisis was inducing those who were having difficulty with their finances to seek out other options.

He went on: “Add to that the rise in food, fuel and energy costs and it’s not surprising that people are feeling the pinch in their pockets. Those who are struggling financially have to readjust their spending to more realistic levels and consider other options, such as informal arrangements.”

This increasing movement towards debt management as a means of solving long-term financial difficulties was further reinforced by the TDX Group, which provides detailed debt collection information to banks.

Speaking very recently, Mark Onyett, chief executive of TDX, said that 2008 was likely to be a boom year for Individual Voluntary Arrangements (IVAs).

He commented that as the number of problem debts increased, up to 600,000 people could be forced into bankruptcy or in to taking up an IVA.

“For the vast majority of people this year,” he went on to say, “refinancing and remortgaging won’t be available as a solution. The choice will be narrowed down to bankruptcy, a debt-management plan or an IVA. There could therefore be a doubling of the number of IVAs.”

Read Credit Crunch Likely to Impact on Car Insurance

Understanding Car Insurance Discounts

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Posted 2008-04-24

Trying to save money wherever you can is important to us all. Car insurance should be no different. Do not assume that your agent knows everything about you and your vehicle.

Drivers should take advantage of all discounts that many providers offer, that can significantly reduce the cost of car insurance. Understanding discounts and how they can affect auto insurance premiums can help smart shoppers make better decisions about their coverage and possibly save themselves some money in the process.

Read below to identify possible discounts that could help you save on auto insurance this year. Other than discounts, there may be some other ways for you to save on your insurance premiums. We will go over several discounts that can help with your current situation.

First, there are discounts for Auto Safety features. Certain states will give you discounts for anti-lock breaks. Make sure you know if it is two or four wheel anti-lock break vehicle. Automatic seatbelts and airbags are frequently discounted on your insurance premiums. In most states, a defensive driver class discount may apply. If the principal driver usually 55 years old or older has completed an approved defensive driving class a discount could apply. Keep in mind that most states will only approve this class if it is voluntary meaning that it was not the result of a violation or infraction.

Some insurers will give you a discount for having multiple vehicles. In some cases, this will only apply if you have two or more drivers. If you have a clean driving record, meaning you do not have any tickets, accidents or suspensions in the last three years (some companies require five years) then you could be eligible for a safe driver’s discount.

Many companies will reward you with staying with the same insurance company for many years without any accidents reported. They will offer you a renewal discount. It makes sense, you have carried insurance with a company for several years, and have not had an accident, your insurance company likes you and wants to reward and keep your business. Some companies honor you with a discount if you had prior limits on your previous policy. They discount you because they understand you are a better risk.

Conversely, if you do decided to change insurers a proof of prior insurance discount may apply. Most insurers request at least 6 months of consecutive insurance from the previous insurer. If you are a full-time student who meets certain grade requirements and are unmarried and usually under 25 years of age (some states the age is 21) you could be eligible for a good student discount. If you own a home, including condominium, town home, or mobile home, which is used as a principal residence, a discount could apply. Military personnel either currently active or retired from any branch of the US military a discount could apply. If your vehicle is equipped with an anti-theft device, a discount could apply.

You could lower the cost of your insurance in other ways.
For people who own older cars, it may not be necessary or cost-effective to protect them with collision and comprehensive coverage. By comparing the book value of your vehicle and the premium that the insurer has offered, you may find that it cost as much for the insurance as it does for the vehicle. If the car is worth less than $2,000, you will probably spend more insuring it than it is worth. The whole idea of driving an older car is to save money, so why not get what is coming to you.

In addition, keep in mind that the type of vehicle you buy could greatly affect your premium. A flashy red sports car is usually going to cost more to insure than a mid sized sedan. This is also true of vehicles that are on the list of most stolen. There are many ways that policyholders can save on their insurance. Knowing more about auto policies and premiums can help consumers take advantage of less obvious discounts while ensuring that they have the appropriate protection for their vehicles. The last way to save is to assume more risk. If you chose higher deductible on your Personal Injury Protection or Comprehensive and collision coverage will lower your premium as well. The deductible is the amount of money you have to pay before your insurance company begins paying the rest.

Understanding how discounts affect your insurance rates is important to save you money.

Read Understanding Car Insurance Discounts