Customers are becoming increasingly on the ball regarding theirinsurance policies
Insurance is available for almost everything these days and the web has in part produced a highly transparent and competitive market place for insurer services. You are required by law to have certain insurance such as car insurances or medical insurance in many countries. Other insurance not required by law is seen by most as a ‘must have’ such as home contents insurance or insurance for a person’s business interests or property belonging to their business.
There is then another type of product focused mainly on the consumer market that is highly specialised such as auto insurance, wedding insurance or Insurance for adventure holidays or extreme sports. Either in the high street or on the internet, companies set their policy prices and excesses at varying rates according to many different variables. There is also a secondary market for the services of insurance brokers who trawl the market for products at the behest of their consumer or corporate clients. Another service offered primarily through agents is underwriting.
This is where the risks of any given insurance venture are calculated and the underwriter decides what the insurer should charge for their services or whether or not insurance should be offered at all. To take the example of car insurance, the underwriter would take a detailed look at a drivers accident record. Another example might be medical insurance where the patients medical records are examined. The internet is certainly helping helps the insurance marke remain competitive and transparent but some customers are still finding themselves uninsured when it really matters. A good example of this is winter sports insurance.
The industry believes that more than 50% of travelers to ski resorts have no insurance and although the other half do, less than a quarter of them are actually covered for skiing and snowboarding which are categorised by most insurers as ‘extreme sports’ and not included in their basic cover. Most travelers to Europe also think that their E111 Is good enough for treatment but this is untrue at most resorts. A very recent example of The way the insurance market is adapting is the furious competition on price between rival providers of auto insurance that has been in the main facilitated by the introduction of price comparison sites.
In this country, we are legally obliged to have car insurance so It simply must be bought by every individual with a car. This puts price up there as the primary competitive factor. A recent example of a failure in the sector was when payment protection insurance policies (PPI’s) were discovered by the FSA to be negligent drafted or having been fraudulently marketed. This has caused a storm of litigation from customers through compensation companies and firms being created for the single purpose of acting as legal assistants so that customers can claim back any PPI that is covered by the FSA’s investigations. A further dubious insurance product is identity theft insurance that claims to refund the subject for losses on account of cyber fraud or identity theft. However many people are unaware that the bank is in most sets of circumstances liable for such acts.
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