The motor insurance industry has come under scrutiny for this possible malpractice and the OFT investigation will try to resolve how widespread this practise is within the industry.

The concern is that insurers are stoking up prices by selling details of their policy holders’ accidents to no-win, no-fee solicitors. If like me you have been unfortunate enough to be involved in an car accident in the past couple of years, the likelihood of you receiving a call out of the blue or more likely a text from an unknown source days after reporting an accident to your car insurers, suggests this malpractice is writhe in the motor insurance industry.

Fortunately, I was only involved in a minor traffic accident with no casualties and I was nothing more than shaken up by the experience.  But imagine a worst case scenario whereby you find yourself having to deal with offers to win compensation when you are grieving.

Furthermore, the OFT are also investigating the cost of motor accident repairs and courtesy replacement cars.

Insurance companies recommend car accident and car hire supplier.  In my case, the accident repair garage my insurer recommended was a Mercedes garage, 10 miles away from my home.  As my car is a Honda Accord, and I have a good relationship with my local Honda dealer, I questioned how this could be better for me and cheaper for the insurance company.  I wasn’t given an answer, just told that it would delay repairs to my vehicle if they had to send a representative out to inspect the damage and approve an ‘independent quote’.

It is alleged that some “approved” garages also pay referral fees to insurers too.  In exchange, the insurers stipulate expensive paint and parts and even higher labour costs. The costs of which is paid for, and helps to justify, higher car insurance premiums.

Sonya Branch of the OFT said:

“Our concerns relate to the provision of third party vehicle repairs and credit hire replacement vehicles to claimants, where we suspect companies may be competing to extract money from each other rather than keeping premiums as low as possible and providing car owners with value for money.”

Preliminary findings by the OFT strongly suggests there is a correlation between referral-fees and the actual rise of car insurance over the past 12-24 months.

For many of us who rely on our cars whether they be a two-seater Smart car or 7 seater 4×4 there is no alternative than to shop around for the best deal and look to be rewarded by a no-claims bonus or insuring two or more vehicles at the same address. But it is a comforting thought that the OFT are at least looking to tackling such irregularities in the motor insurance industry.

Motorists have been among the worst affected throughout the economic crisis, between the oil producers and government fuel duty we have recently witnessed fuel prices escalating to over the £6 per gallon barrier.

The latest budget news deferring the anticipated fuel duty increase in April was expected by most and does little to quell the anger of motorists parting with half their wages to fill up their vehicles.

Motor insurance premiums have risen on average by 31% over 2010 figures and could be set to rise further still in the light of the recent EU ruling stating that insurance companies cannot treat male and female drivers differently when supplying motor insurance products.

The latest reports from the insurance industry suggest that buying home insurance is likely to cost us more than last year, although it has to be said that the average rise of 6% in this market is a little more palatable than the huge increase in motor policies.

Reports suggest that a typical average premium for buildings and contents insurance has risen from £142 last year to £151 in 2011, not a great deal, but still an extra expense that most of us could do without in the current climate.

It appears that insurers are keen to recoup the cost of claims made during the freezing winter weather last year, but with extreme and severe weather in the UK becoming a trend, the costs of insuring our homes is set to increase indefinitely.

Another area that has been attributed to the rise in premiums is fraudulent claims which appear to increase in times of recession, one insurer claiming that these claims cost each of us £44 on our annual premium.

There are of course various websites available that compare home insurance products and we would highly recommend that you shop around for the best deals available.

The majority of insurance companies prefer to insure both buildings and contents in one package and will offer a reasonable discount when these two products are bought together.

If you are about to replace an existing policy it is a good idea to have your previous documents available when checking out alternative insurers, this will enable you to compare services and premiums on a like for like basis and give peace of mind that you are at least getting the same cover as previously held.

In his announcement Clarke said that a reform was needed to “put the brake on runaway legal costs and mean a better deal for genuine claimants and insurance customers.”

The ABI have long campaigned that high legal costs in settling personal injury claims is one of the main reasons for the general rise in motor insurance premiums.

Nick Starling of ABI said; “For too long ambulance-chasing lawyers and claims management firms have encouraged many people to believe that there is a compensation culture to exploit. The result has been a slower process for genuine claimants, and out of control legal costs that end up being paid for by all consumers through higher insurance premiums.”

The ABI claims that for every £1 paid out by motor insurers in compensation, another 87 pence is added in legal costs.

We will have to wait for news from the government as to what reforms they will make to the compensation market and whether motor insurance premiums will decrease as a result of any such changes.

According to Aviva insurance almost all of the 758,700 plants seized by the police in 2009/10 were being cultivated in residential properties and the insurer is warning landlords to be more vigilant as claims resulting from seizures have shown an increase of 30% in claims made against the insurer for damage caused to the property.

Cannabis farming tenants will often line walls, ceilings and doors with plastic or polythene, and windows will normally have blinds or curtains closed to obscure any activity.

The plants are watered through a watering system and high powered lighting is installed, often resulting in the tenant bypassing the electricity supply or at least tampering with it.

Heat from the lights and moisture from the water can cause condensation to be produced and the pungent smell of the plants can permeate walls.

Aviva said; “Cannabis farming comes with serious risks for landlords; properties can be completely ruined inside to make space for plants, water damage can occur and fire poses a risk due to interference with electrics or strong lighting left on for a long time.”

The company adds that it is working with both clients and brokers to raise awareness regarding tenants using domestic dwellings as cannabis farms, ensuring landlords have the right level of cover in place, rather than standard home insurance.

The changes will not come into effect until December 2012 allowing the industries in question time to adjust, but doubtless there will be some increases in both in the interim.

The British Insurance Brokers’ Association (BIBA) said currently the cost of the average car claim by an 18-year old man was £4,400, while that for an 18-year old woman was £2,700.

“The ruling will have a significant effect on the insurance industry which has used the system of risk based pricing to award discounts to lower risk drivers like young females who are statistically safer drivers.

The industry will have to change its model and effectively females will now pay a cross subsidy for males on their insurance premiums,” said a BIBA spokesperson.

Young female drivers are likely to be among the worst hit by the ridiculous ruling and the AA warns that premiums for females under 30 could rise by up to £400 per year.

Maggie Craig, acting director general of the Association of British Insurers (ABI), said: “This gender ban is disappointing news for UK consumers and something the UK insurance industry has fought against for the last decade.

“The judgment ignores the fact that taking a person’s gender into account, where relevant to the risk, enables men and women alike to get a more accurate price for their insurance.”

Pensions

The ruling will have an effect on the cost of pensions when it comes to buying an annuity, as women statistically live longer than men and so receive a smaller annual pension for a longer period from the same size annuity pot.

The first impressions from the pension industry suggest that men will end up getting smaller annuity income than they do now when benefits are bought into line with those of women.

So as far as I can tell, without being discriminatory, we will all end up losers!

The necessary spending cuts implemented by the coalition government will surely mean that most of us will either have less to spend or higher bills to pay in the new year and onwards.

If the CBI predictions are right home owners will be paying a lot more interest on their mortgages although at least that would benefit savers who may as well have kept their money under the mattress for the last couple of years, as I’m sure some actually did!

Travel problems have been very much at the forefront of the news this year, what with air strikes, volcano ash and most recently severe disruption to flights and trains due to the weather.

I would imagine that this will somehow equate to an increase in travel insurance premiums in the near future as insurers attempt to recover some of this years losses.

The motor insurance market however has already hit the headlines earlier this year when the AA reported that premiums had generally risen by over 40%. The reason given for such an incredible leap in premiums was young male drivers.

There are apparently more accidents on the UK roads caused by young male drivers than any other group of drivers, they also cause more deaths on the road and often drive without insurance. They were also found to be the most likely age group to drive whilst under the influence of drink or drugs.

Despite often being a loss leader, the UK motor insurance market is also seen as a bit of a jewel in the crown amongst insurance companies as the many leading insurers advertising on TV will testify.

This represents some good news for those of us looking for cheap car insurance and also means that there is alternative to accepting the new premium from your current insurer if it has increased beyond belief.

Competition is still very healthy in this market and in these hard times it is worth looking at how further savings can be made on motor insurance by increasing excesses for instance or looking out for advice and tips on insurers websites.

The Advocate General has argued that offering cheaper premiums to women could be illegal even though women make fewer claims, cause less accidents and, statistically, make less expensive claims.

Nigel Lacy of Young Marmalade believes that such a move, were it to become law, would be grossly unfair particularly on young female drivers.

“There is a minority of young male drivers who are increasing the cost of insurance for all road users. Statistics from the Department of Transport indicate that one third of all the men killed or seriously injured on the roads are less than 25 years-of-age,” said Mr Lacy.

“Those under 21 were ten times more likely to have an accident than the over 30s. The cost of their claims is more than three times more expensive than the older age group.”

Currently, a young woman in the 17 to 22 age group in the UK can expect to pay about£1,400  as opposed to a male driver of the same age who would be expected to pay at least twice that figure. If the EJC decided that this was discriminatory this discount would disappear and the cost of insuring young male drivers would be distributed throughout the whole industry.

Fair comment, but as the AA recently pointed out motor insurance premiums for all of us have risen by a staggering 40% plus this last year, so surely we are ALL paying the price of the problems caused by young male drivers already.

While we are all being hit by the huge increase in motor insurance the experts believe that their is a minority of drivers that are causing the rest of us to pay more on our premiums.

The minority in question are young males between the age of 17 and 22 years old. Nearly a third of male drivers killed or seriously injured during 2009 were aged under 25. Those under 21 were ten times more likely to have an accident than the over 30s. The cost of their claims is more than three times more expensive than the older age group.

Motor insurance premiums for this group have risen above the average rate and young drivers in this group on average are likely to pay around £2,500 for their motor insurance, although the young driver specialist insurer Marmalade believes that young male drivers are likely to be paying up to double that figure.

With the extremely high risk involved it is little surprise that insurance companies feel the need to collect such massive premiums from this group, but pricing them out of the market altogether is also having a detrimental effect on the industry.

There are more drivers than ever (of all ages) who are prepared to take huge risks on the road by driving without insurance and young drivers add further to the risk by having little experience and in many cases no respect for other road users or laws.

Young driver specialist, Marmalade have warned that improving the safety of young drivers was the only way to reduce insurance premiums for everyone and they are currently testing on-board systems which monitor how the car is being driven, highlighting any issues such as excessive braking or cornering, which may be of concern to an insurer.

This may lead to the withdrawal of insurance as an ultimate sanction for drivers deemed to be a higher risk. Marmalade is also keeping the cost of its insurance to allow more practice in family cars at the vital learner driver stage at the same level as last year despite the massive rises seen elsewhere.

Nigel Lacy of Marmalade said;

“There is a minority of young male drivers who are increasing the cost of insurance for all road users. The only way insurance premiums can be reduced is if young people can be encouraged to drive more safely.

The cost of insuring this group or dealing with uninsured drivers obviously impacts throughout the whole industry. At Marmalade we are pioneering ways that will make the roads safer for all motorists.”

Marmalade provides young drivers with cars and insurance as a combined package. The result is that young drivers are in newer, safer cars and enjoy lower insurance premiums. The company also insists that new drivers undertake additional training after passing their test to improve the levels of young driver safety.

The issue for parents these days is how to control the cell phone craze when the child is old enough to want one. Parents certainly see the merit in giving their kids a cell phone, but there are dangers as well.

The merits are simply to be reachable. Most families have two working parents, or they are living in single parent households. In either case children need to be reached and cell phones offer the best chance of doing that. With the price of family plans becoming more economical, there is much reason to include pre-pubescent children in on cell phone plans.

Still, there are dangers to allowing pre-teens to have cell phones. One of the most glaring dangers is the connection it gives them to their friends. This, on the surface, isn’t worth noting but there are certainly disadvantages. Kids open themselves up for harassment and to things like sexting. Truthfully, having a cell phone for a child is about responsibility and that’s a decision that only a parent can make.

There are limitations that can be placed on cell phones making them a little more easy for parents to justify. They can cap the minutes used on the phone or turn off the texting option all together. Cell limitations are attractive to parents, but do not completely convince them to buy into the cell phone craze. The most important part of the decision is and always will be the child’s willingness to handle responsibility.

This means that it covers everything from banks to debt consolidation services to motor insurance companies and more. Each year, the organization release a public report on the companies that have received complaints, providing information on the number of complaints, whether or not they were addressed, which companies get the most complaints and more. Beyond that, the report provides some interesting insights into the trends for the industries covered.

Not many have taken a look at the tendencies for insurance companies as released in this report. Rather, the focus has been on Lloyds, the bank that received a phenomenally high number of complaints in the 2009 to 2010 year. The realities of complaints within the insurance field, however, are intriguing.

Two notable changes can be seen when comparing the 2010 to the 2009 report. First, the number of overall insurance complaints has increased dramatically, spiking up about 40 percent. Although most sectors of the insurance world have seen an increase in the overall number of complaints, one has actually seen a decrease. The automotive insurance complaints actually decreased by more than 10 percent. The other insurance sectors that the FOS handles complaints for includes everything from home insurance to investment insurance to travel insurance and more.

The overall number of complaints has increased across the board for the FOS, and part of that may not actually be due to a decrease in quality. After all, the FOS is becoming a more recognized name and service through which people can file complaints. Nonetheless, the trends seen from year to year, as well as the companies complained about, is telling.

Interested in getting more details or finding out about a specific business? The FOS website contains the full public report and is entirely free of charge.