How insurance works....5 day 'course'

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How insurance works....5 day 'course'

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Just signed up for this and will post the document each day (5 days worth), source moneysupermarket.com;

[font=Verdana, Arial, Helvetica, sans-serif]DAY 1: What you'll learn, and, most importantly, how you'll save![/font]

[font=Verdana, Arial, Helvetica, sans-serif]Hello Paul *******,

Welcome to our car insurance email course, aimed at getting you the best deal possible on your car insurance - without compromise on cover - by taking a good look at it from the ground up.

All it will take is just five minutes a day for FIVE days, and we guarantee you'll leave understanding your coverage options more fully; feeling more confident in your policy choices; and, getting the best car insurance premium you possibly can.
We are going to change the way you think about insurance and that in turn will change the way you buy it.

And when you know you're making safe and wise choices, it's easier to keep an eye on the costs.
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[font=Verdana, Arial, Helvetica, sans-serif]The Plan
When the time comes, we'll ask you to get several car insurance quotes, and compare the results. This "homework" will give you a great head-start by finding car insurance providers and applying for a quote through them.

www.insuresupermarket.com, allow you to enter your personal details just once, look at the whole market and save your quote. This means that as you learn more about how to save on your policy, you'll be able to go back and make changes to lower your quote!

The importance of good car insurance policy.

Every insurance policy you buy is an important one, but we think that right now is an especially important time to examine your car insurance.

Why?

Two reasons:

1. What you have to pay. Car insurance premiums are increasing at an average rate of close to 14% a year. Both new car prices and the number of vehicles per household are steadily rising, too. Count on the cost of your car insurance policy to follow suit.

2 Your financial protection. One big reason car insurance rates keep rising is the cost of liability. Large amounts of money for the injury, pain and suffering, and economic losses caused by a car accident are more and more commonly being awarded by sympathetic juries. (And let's not forget the legal fees involved in any such cases.).

These two facts taken together may make you feel like you don't have a lot of options. Car insurance rates are going to rise, and if you're going to keep your coverage high, you're going to have to pay more. Right?

Not necessarily. There are options and we can help you find them. We think that if you really understand a few important "principles of insurance" and put those principles into action when you buy your policy, you can maintain good quality cover whilst keeping your costs low.

And we'll do all this in just five minutes per day (for FIVE days, of course). Here's our schedule for the week:

• DAY 1: We'll review the basic coverage options on a car insurance policy. If you've been insuring cars for a while, this might seem like old hat. But don't worry, we'll be brief!

• DAY 2: The mechanics of car insurance - or, in layman’s terms - how it all works. This may sound obvious, but it's not. We'll examine exactly where your premium goes so you can see what you're really paying your insurance company for. You might be surprised.

• DAY 3: Who should be your research tool? We will guide you through the main options where you choose to research and buy your car insurance.

• DAY 4: Getting the right policy at the right price. Perhaps the most important day. Now that you know what kind of coverage you need and why you need it, we're going to help find you the right policy at the lowest possible cost!

• DAY 5: How to keep lowering costs. You have your low car insurance quote, now we'll tell you how to cut your costs even further over time.

Okay, back to today's lesson.

We're just going to take a brief look at the car insurance policy most people have and look at some car insurance facts and figures.

The Basics of Car Insurance
A car insurance policy is actually many smaller policies hammered together. What your total policy should look like depends on where you live, what you drive, and what your personal circumstances are.

The major types of car coverage are liability, medical or personal injury, collision, comprehensive, third party fire & theft, third party only,

This, briefly, is what each policy covers:

• Liability. Probably the most important coverage on any car policy, standard car liability is actually made up of two policies, bodily injury and property damage. They cover the cost of injuries and damage you cause to another in a road traffic accident.

• Medical. This coverage pays for the treatment of any injuries you might sustain in a car accident, regardless of who was at fault in the accident. It includes coverage for other economic costs, like lost wages or out of pocket expenses.

• Comprehensive. This covers damage to your car, regardless of fault. The cover will include accidental damage, malicious damage, theft, natural disasters and the damage you cause to other peoples’ property. If your car is financed, you'll probably be required to have a Comprehensive policy.

• Third party fire & theft. This covers damage to your car only if via fire, damage to other peoples property and if your vehicle is stolen.

• Third party only. This covers only the damage to other peoples’ property - your own vehicle is not covered.

• Excesses. Most policies will have a sum of money that you will have to contribute in the event of a claim. These can range from £50 to £500 depending on cover, In addition to these compulsory policy excesses you may wish to take a voluntary excess, which if available can reduce your premium.

So, car insurance can be expensive, but not nearly as expensive as the unlucky events it protects you from. However, that doesn't mean you should just pay any old premium you're quoted. We think that, instead, you're entitled to a reasonable price for coverage that you understand, and value.

But we shall save that for tomorrow, when we'll be taking you through how the car insurance industry works . . .
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[font=Verdana, Arial, Helvetica, sans-serif]Today's Action Point[/font][font=Verdana, Arial, Helvetica, sans-serif]Check your policy to see what type of cover you currently have and ask yourself is this the right cover for me?[/font]
[font=Verdana, Arial, Helvetica, sans-serif]See you tomorrow!




The Car Insurance Team
Insuresupermarket
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Never know it might be interesting so i'll post up the emails each day :)

It says it will enable you to use things like age to your advantage, yeah right ;)
 
The Negotiator said:
Never know it might be interesting so i'll post up the emails each day :)

It says it will enable you to use things like age to your advantage, yeah right ;)

only if your 50 i bet!

I always wondered that you know when it asks your occupation - does your quote depend on your occupation. My mum said being a student made your policy higher? is she pulling my leg?
 
Mine personally? Tell her to mind her own business :p

I imagine a few occupations knock it down, a few knock it up, pennies I assume too, also some insurers have deals with unions so if you had a specific occupation they may offer you a hefty discount.
 
The Negotiator said:
Mine personally? Tell her to mind her own business :p

I imagine a few occupations knock it down, a few knock it up, pennies I assume too, also some insurers have deals with unions so if you had a specific occupation they may offer you a hefty discount.

...Well that Paul from the forum.... :D

Lol yes my mums is cheaper because she works for the government (n) But only certain companies offer the discount. i tried to put a couple of different occupations in on online quote but it didnt seem to make a difference. i just wondered why they asked if it doesnt change the price. Maybe they're nosey :)
 
See, always right me ;)

I expect it's another way for them to possibly refuse paying out lol.

Maybe i'll find out soon!
 
I was wondering who insures insurance companies. Bearing in mind many have offices that are open to the public, they should have public liability insurance, but what would be the point in them insuring themselves. I'm not talking brokers, I'm talking the actual insurers.
 
black_cinq said:
only if your 50 i bet!

I always wondered that you know when it asks your occupation - does your quote depend on your occupation. My mum said being a student made your policy higher? is she pulling my leg?
well as a chef they also ask if you work on licensed premises.mainly due to the freely available alchohol and odd working hours leading to a 'higher' risk.funnily enough my insurance went up when i became a (mature)student (n)
 
Neofolis said:
I was wondering who insures insurance companies. Bearing in mind many have offices that are open to the public, they should have public liability insurance, but what would be the point in them insuring themselves. I'm not talking brokers, I'm talking the actual insurers.
Maybe Lloyds names cover the risk....
 
Day 2: (got email slow down due to spam so received this only 10 mins ago)

DAY 2: How Car Insurance Works:

Hi Paul ********,

Today we're going to take a look at a part of car insurance that most people don't usually think about - the way the insurance business works.

Or, more to the point, how your car insurance company uses your premium once you have paid for your policy.

You may think – what is the point of this?

But once you take a closer look at what your insurance company uses their premium income for, you'll be better able to design your coverage wisely and make more efficient use of what you are paying for.

Now, we all know how insurance works: you pay a premium for a certain level of protection in the case of a "covered event". If, unluckily, the "covered event" should take place, the insurance company pays up to your policy limit toward your expenses. And that's pretty much how it looks from our (the policyholder's) viewpoint.

But, realistically, your premium doesn't just pay for your "covered events". It helps pay for anybody's "covered event". Once you pay your insurance premium, it's mixed up in the pot with everyone elses. And the insurance company spends the money as the need arises.

So let's take a closer look at where the needs arise:

You probably expect that paid claims make up the majority of an insurance company's expenses, and that's basically true. For a car insurance company, a little over half of the revenue goes directly toward paying for the cost of their policyholders' accidents.

How about the rest?

Here's a break-down of where your premium money goes:

• 50% for claims

• 25% for the legal and administrative costs

• 25% for the costs of running the company

Obviously, these numbers vary from insurer to insurer. Some insurers are better than others at saving, and some are better at reducing there overheads and business operation costs, thus saving you money.

Let's look at each expense on its own:

Paying the claims
Surprisingly (or not, depending how you look at it,) most of the money paid out on car insurance claims is paid on property damage. Collision damage claims make up around 50% of an insurance company's total expenditures.

But if you look at it another way the largest amount a car insurance company will ever pay you for a collision damage claim, fire or theft claim is the "fair market value" of your car.

And unless you're driving a Rolls Royce or Aston Martin, that's not a great deal of money when compared to, say, a big medical or personal injury claim.

So offering collision and comprehensive cover does cost insurance companies a lot of money, especially considering what small policies they really are.

Insurance Company Admin costs.
Insurance companies spend a lot of time and money processing and settling claims. As much as a quarter of an insurance company’s total expenses can be used to handle these activities.
1. Legal Costs
2. Insurance Fraud
3. Un-insured drivers
4. False injury claims

That said, there is little you can do to affect the rate you pay for your car insurance apart from changing insurer.

Just what can you change?

The biggest change is achieved by reducing the cost to your insurer for a damage claim.
This is done by opting to take an Excess on your policy.

In the event of a damage claim you are saying that you are willing to accept responsibility for a portion of the damage equal to the Excess total agreed upon when you take out your policy.

In addition, these optional excess payments can reduce your initial premium by up to 10% depending on the amount and the insurer.

The cost of running an Insurance Company.
The remainder of your premium goes into the operational costs of running the Insurance Companies business. So what can you do about this?

Insurance companies spend a lot of money on advertising, staff and commission payments to brokers, and agents. If you could bypass both these costs you could save money on your policy.

The best way is by looking for insurance online. In this way you are already accessing the most direct way of buying your insurance.

By comparing insurance quotes online, you can bypass the insurance broker or agent and as such remove their fees and commissions, while at the same time researching the market quickly and conveniently.

Even better, if you research with an online insurance aggregator you can compare rates from multiple providers at the same time and only complete your information once.
Therefore, it is important to realise that www.insuresupermarket.com are the only “Full Search” provider in the UK marketplace today.

Tomorrow's topic is the philosophy of insurance

We still have:
• DAY 3: Who should be your research tool?. We will guide you through the four main options where you choose to research and buy your car insurance.

• DAY 4: Getting the right policy at the right price. Perhaps the most important day. Now that you know what kind of coverage you need and why you need it, we're going to help find you the right policy at the lowest possible cost!

• DAY 5: How to keep lowering costs. You have your low car insurance quote, now we'll tell you how to cut your costs even further over time.

Today's Action Point
See what happens when you lower your or increase your excess

See you tomorrow!




The Car Insurance Team
Insuresupermarket
http://www.insuresupermarket.com
 
Last edited:
moneysupermarket is an excellent website......they have nothing to sell.

DAY 3: Who should be your research tool?:

Hi Paul ***********

There are four main options open to you when it comes to researching and then buying your car insurance.

Today we will guide you through those options and highlight where we think you should be concentrating your efforts to get the quickest, widest, most efficient and productive results.

To start therefore we need to explain the differences between the four options and how well each delivers on the areas that should be important to you.

Insurance Brokers
The High Street Insurance Broker has been with us for decades.

Their proposition for some time has been to deliver the customer choice by utilizing their computer systems to find you the best deal for your car insurance.

The realities are that the Broker can only ever present those insurers that he has deals with.

The other interesting point is that the deals they have can differ from Broker to Broker. You may well be told that they will be looking at the whole market for you but this is just not the case as they can only ever look at the Insurers they have deals with which could exclude a large percentage of the actual car insurance market.

Direct Insurers
Known also as Direct Writers.
The first and best known provider in this space is Direct Line. Today however, there are over 12, the biggest of which I am sure you are aware of via their extensive marketing:
Direct Line, e-Sure, Admiral, Hastings, 1st Alternative, Churchill, Privilege, Norwich Union Direct and Cornhill Direct, Morethan, Elephant and Budget.

The reason Direct Insurers came to be was to cut out the middle man in the chain of supply (the middle man being the High Street Broker). Commissions that were traditionally paid to Brokers by the Insurer for sending business to them could be saved if the Insurer marketed themselves directly to you, the consumer.

This would then directly benefit you with cheaper car insurance.

The problem with this model today is that the Direct Insurers have no longer held on to their massive premium discounts and spend huge sums of money marketing their brand names.

Branded Providers
The next phase was for the large UK brands to start selling insurance.

These include:
Virginmoney, Tesco, Sainsburys, MBNA, Marks and Spencer, the Post Office, the major Car dealerships and Kwikfit.

The idea was to use their marketing and brand recognition muscle and present themselves to you as the best option. If you are happy with the price of your weekly shop or the way that you were serviced when you purchased your new car then when these brands told you they could now provide you with the best car insurance you would be interested in looking at this over and above the other options you previously had with the Broker or the Direct Insurer.

Again the realities here are that the UK Brands are actually supplied with their insurance products via a Direct Insurer or a Broker.

What this does is limit your choice again.

So where do you go from here?
You will learn over the remaining days of the course that research is the key and as such putting all your research eggs into one basket by only contacting the High Street Broker, the Direct Insurer or the UK Brand will limit your ability to finding the most competitive price for your car insurance.

So what’s the best option?

The “Full Search“ provider
Just as Direct Line revolutionized the way in which you bought and thought about your car insurance, the Full Search provider will undoubtedly become the de-facto way with which you research and buy your car insurance today.

With a Full Search provider you are able to enter your personal data once and then a full search of the market is performed to return a list of potential car insurance providers that will include Insurers, Direct Insurers, Brokers and UK Brands.

Now that we have armed you with this new knowledge let's find the right policy for you at the most competitive price.

And that is what we will be looking at tomorrow.

Today's Action Point
Test the options. Try getting car insurance quotes from a local broker, a direct insurers, a well known brand who offers insurance and then log on to www.insuresupermarket.com

See you then...





The Car Insurance Team
Insuresupermarket
http://www.insuresupermarket.com
 
Neofolis said:
I was wondering who insures insurance companies. Bearing in mind many have offices that are open to the public, they should have public liability insurance, but what would be the point in them insuring themselves. I'm not talking brokers, I'm talking the actual insurers.

Insurance companies tend to insure themselves for things like company cars and public liability but there are companies called re-insurers who insure a percentage of the risk.

The company I work for used to insure a industrial site where there was a massive explosion (It was in the news a while ago).

Because they had used reinsurers to "re-insure" an amount of the risk we only paid a couple of million instead of the hundreds of millions that it would have cost if we had not reinsured. I think a few of the reinsurers went bust!
 
Paul in the email you received about the breakdowns they left a lot out!

Like the fact that all the large insurers have to pay between £500,000 to £1,000,000 to the Motor Insurers Bureau who pay claims for uninsured drivers then "try" to get the money back of the uninsured person. But they do help insurance companies if one of there customers has an accident abroad.
 
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