Archives for October 2012

The Truth About Insurance Claims

With the recent data revealing the steady increase in whiplash claims despite the drop in road accident injuries, many consumers may be rejoicing.

A report released by the Institute and Faculty of Actuaries shows that the increase of claims has cost the insurance industry nearly £400m. However, companies have yet to mitigate the blow by relaying the cost to UK motorists. In fact, the data indicates that the average cost of an insurance policy has decreased.

This is partially because now, more than ever, it’s easier for UK drivers to file a whiplash claim. Whiplash, a soft-tissue injury to the neck, can occur whether the accident is severe or minor. A person experiences whiplash when there is an abrupt jerk of the head forwards, backwards or sideways.

The sudden extension and flexion of the head, known as a neck sprain, can cause damage to the ligaments in the neck, cervical muscles, nerve endings, intervertebral joints and discs. Although a person may experience whiplash, the symptoms may not be prevalent until 24 hours or more after the initial trauma. The symptoms can range in severity and may include neck pain and stiffness, headaches, dizziness, muscle spasms, pain in the shoulders and lower back, numbness in the arm and hands, blurred vision, difficulty concentrating and irritability.

Whiplash most often occurs during road traffic accidents when a car from behind collides, causing the head to jerk backward and then whip forward. Anyone can experience whiplash, even in a minor accident in which the speed was low or there is no damage to the car.

The length of recovery and the treatment required depends on the severity of the injuries. In minor cases, a person may recover within a couple of weeks. However, it may take several months or even years for someone to recover from a severe neck sprain and other injuries associated with whiplash.

Oftentimes, it is advised that motorists seek legal aid to help rectify the problems they have incurred from their whiplash. Not only does it cause physical harm and pain, but a victim’s injury may be so severe that there is an absence from work and a decreased quality of life.

A lawyer that specializes in road traffic accidents can help victims file a claim and receive compensation. The report indicated that on average, claimants in small third-party injury claims are awarded roughly £8,400 in whiplash compensation. This is on the lower end of the scale, as some claims can be as much as £100,000.

The payment can help cover any medical bills, lost income and other injury-related expenses. Yet, with so many insurance companies paying for claims, some experts question how likely it is that motorists’ insurance prices will continue to be unaffected. For now, it’s all a waiting game.

How to protect your lifestyle

Sometimes it is possible to hear some quite extraordinary views about the nature of insurance protection and lifestyle.

Occasionally these are close to being potentially dangerous myths and here are a few of the more typical ones together with a rational comment.

The government will help pay your mortgage if you can’t

Although not totally incorrect, this is very significantly misleading.

If you lose your income and are unable to continue repayments on your mortgage, your mortgage provider may be willing to help, where they can, for a short period. 

After that, they may inevitably move to repossession.

Government help in such situations is extremely limited.  It may relate only to helping with the interest repayments on your mortgage and it might be conditional upon you having used any existing financial reserves you have beforehand.

If you’re keen to protect your family home in the event of things such as redundancy or sickness, it might be unwise to rely exclusively on the government aid. 

That is why various forms of mortgage protection insurance exist, such as those policies offered by Drewberry insurance and others.

My employer is under an obligation to keep paying my salary if I am sick

That might typically be true but it is important to recognise some of the limitations implicit in that statement.

Firstly, sickness is only one thing that may rob you of your income.  If, for example, you are made redundant, the statutory minimum redundancy pay is actually relatively limited – particularly if you have not built up an extensive service record with the employer concerned.

Secondly, even in the case of sickness, your employer is under an obligation to pay you sick pay for 26 weeks only.  After that time, your income may stop and then you may immediately struggle to continue paying your mortgage.

That is why it might be advisable to consider things such as mortgage payment protection insurance.

Mortgage lenders won’t repossess your property if you are seriously ill

Unfortunately, there may be little hard evidence to support this assertion.

Of course, you may hope that in such circumstances your mortgage provider may be sympathetic but their patience is unlikely to be unlimited.  The one thing you perhaps will not want if you are long-term sick and unable to work is to have to start to worry about whether or not you and your family will be able to retain the roof over your head.

In order to fully protect yourself against such circumstances, you might wish to consider investigating critical illness cover – something that might generate income cover for you for an extended period, perhaps running up to your normal retirement age.

You can’t have two people insured for the same mortgage

Yes, you can.

As it is perfectly possible for a mortgage to be in joint names, it is equally possible to cover the joint risks associated with the two mortgage holders.  That might include life, sickness and redundancy type issues.

Euroferret.com is owned by Mediamash (NI) Limited, who are an Introducer Appointed Representative of Seopa Ltd. The quote system is owned and operated by Seopa Ltd, who are authorised and regulated by the FCA, number 313860. You can view our registration at www.fsa.gov.uk/register/firmSearchForm.do?sid=127135. We do not give financial advice on this website. If in doubt get professional advice and always read the policy information before purchasing an insurance contract.