Car insurance tips for students

Car insurance tips for students.

Post By: Insurance Top Stories

Car insurance prices are continuing to rise, with the average cost of fully comprehensive cover now standing at £700 a year. However, things are even worse for students, with research by moneysupermarket.com suggesting that a newly qualified 17 year old male driver can expect to pay £2,841 for car insurance, while a 17 year old female can expect to pay £1,600.

Why the high price?
Car insurance prices are so high for young drivers due to them being considered more likely to cause an accident, with the Association of British Insurers (ABI) claiming that 18 year old drivers are the cause of 50 collisions in the UK every single day. Male students are more heavily affected due to statistics from the Home Office, which suggest that men are nine times more likely than women to cause a motor offence.

This may seem like a unfair generalisation, and quite frankly it is. However, there is nothing that can be done about it and students (particularly male students) are considered a far greater risk.

How can I keep insurance affordable?
Car insurance can actually be more expensive than the actual price of buying your car, so in order to save money you should really be considering car insurance before even purchasing the vehicle. With insurers generalising people, they believe that drivers with large engines and modifications are more likely to have an accident. Therefore, they frankly don’t want to take on a young driver with both of these things and will try and price you out of the market. So, it may seem less exciting, but keep your car small and conventional.

Once you’ve bought your car you should then consider the type of policy you are going to take out. The three options available are third party, third party fire and theft and comprehensive. Comprehensive is obviously the best option but it is also the most expensive, with Money Supermarket finding a best offer for an 18 year old student to insure himself on a Ford Fiesta Zetec of £3,167. However, the same student on the same car with third party, fire and theft will have to pay just £1,964. This won’t cover damage to your own vehicle in the event of an accident, so whether it is worth it or not is really the decision of the driver based on how much their vehicle is worth.

Other tips for students when looking for insurance are:

1. Buy online and shop around- Many car insurance firms offer much cheaper deals online than they do in store or over the phone. This also makes it easier to shop around, with the ABI stating that drivers can save as much as 35% on car insurance by comparing as few as five quotes. 
2. Consider a rapid bonus scheme- Some insurers will offer a rapid bonus scheme, where you can earn one year of no claims discount in 9-10 months which will substantially reduce the price of your next policy. 
3. Keep your car safe and secure- When students leave home and go to university, they often leave their cars parked in areas where crime rates are high, which will increase the cost of insurance. Therefore, to reduce the cost try and keep you car on a driveway or in a garage if possible. However, remember not to lie to your insurer, because if your car is damaged when parked on the road it could render any insurance claims void.  Also consider fitting an approved alarm and/or immobiliser to your vehicle if it doesn’t already have one, as this is another good way to reduce the price of your policy.
4. Pay a larger excess- Paying a higher excess will reduce the price of car insurance. However, be careful not to offer to pay more than you can afford in the event of an accident, with the average excess being £250.
5. Pay annually- If you pay monthly, you will be subject to interest charges, so if you can pay it all in one go.
6. Reduce your mileage- Reducing the number of miles you travel will reduce the price of your policy, as your chances of having an accident are obviously reduced. However, don’t go over your mileage allocation, as your insurer will likely refuse to pay up for any claim after you have gone over it. 
7. Add an older additional driver- Adding an older person to your policy can save young drivers hundreds. However, don’t ask a parent to be the main driver covered, as this is illegal and an insurance company will refuse to pay for any claims if you are caught.
8. Pass plus- Doing a pass plus course will cost £100, but can cut 35% off your insurance, which amounts to a saving of over £900 for the average male student driver.

Summary
Driving for the first time is an incredibly exciting and liberating experience but the cost of insurance can often make it a nightmare. It doesn’t need to be like this, and following these tips from moneysupermarket.com, who have had extensive experience of dealing with insurers, can dramatically reduce the price of your insurance policy and make driving for students affordable again.

Consumer Bill of Rights For Personal Automobile Insurance

Consumer Bill of Rights For Personal Automobile Insurance

Post By: Insurance Top Stories

Introduction

This Bill of Rights is a summary of your rights and does not become a part of your policy.  The Texas Department of Insurance (TDI) adopted the Bill of Rights and requires insurance companies to provide you a copy when they issue your policy.

Texas law gives you certain rights regarding your automobile insurance.  This Bill of Rights identifies your rights specified by rule or by state statute, but it does not include all your rights.  Also, some exceptions to the rights are not listed here.  If your agent, company, or adjuster tells you that one of these rights does not apply to you, contact TDI Consumer Protection at 1-800-252-3439  (463-6515 in Austin) (111-1A), P.O. Box 149091, Austin, TX 78714-9091.  For a list of the specific law(s) and/or rule(s) summarized in each item of this Bill of Rights, or if you have questions or comments, contact the Office of Public Insurance Counsel at 333 Guadalupe, Suite 3-120, Austin, TX 78701 (512-322-4143) or www.opic.state.tx.us.

This Bill of Rights does not address your responsibilities.  Your responsibilities concerning your insurance can be found in your policy.  Failure to meet your obligations may affect your rights.

Information

1. You have the right to call TDI free of charge at 1-800-252-3439 or 463-6515 in Austin to learn more about:

• your rights as an insurance consumer;
• the license status of an insurance company or agent;
• the financial condition of an insurance company;
• the complaint ratio and type of consumer complaints filed against an insurance company; 
• an insurance company’s rate as compared to the range of rates set by the state; 
• the Market Assistance Program (MAP) at 1-888-799-MAPP (6277), designed to help those in underserved areas obtain liability insurance; and
• other consumer concerns.

You can also find some of this information on the TDI website at http://www.tdi.state.tx.us. 

2. You have the right to a toll-free number to call your insurance company free of charge with questions or complaints.  You can find this number on a notice accompanying your policy.  This requirement does not apply to small insurance companies. 

Buying Insurance

3. Your insurance company or agent cannot make false, misleading, or deceptive statements to you relating to insurance. 

4. Upon request, you have the right to be told in writing why you have been denied coverage.  The written statement must fully explain the decision, including the precise incidents, circumstances, or risk factors that disqualified you.  It must also state the sources of information used. 

NOTE: The obligation to provide a written explanation applies to insurance companies directly.  An independent agent does not have a specific duty to quote the lowest possible rate to a consumer or to provide a written statement explaining why the agent did not offer the consumer the lowest possible rate.

5. An insurer or agent cannot require you to purchase liability limits greater than the limits required by law (20/40/15) or require you to purchase other types of coverage as a condition of offering insurance or continued insurance to you. 

NOTE: Texas law requires that automobile insurance policies include personal injury protection (PIP) and uninsured motorist protection (UM/UIM) unless you reject these coverages in writing.  Also, as a condition of your automobile loan, your lender may require you to purchase other types of coverage, such as collision or comprehensive coverage, to pay for any damage to your vehicle.

6. You have the right to buy minimum liability, personal injury protection, and uninsured motorist insurance through the Texas Automobile Insurance Plan Association, also known as TAIPA, if you have been denied coverage by two insurance companies. 

NOTE:  After 3 consecutive years with no at-fault accidents or traffic violations, you have the right to be insured by your assigned company as a regular policyholder at a rate lower than the TAIPA rate.  The company must provide you this offer in writing. 

7. You have the right to pay your automobile insurance premium in installments.  Insurance companies may charge a fee for each installment.  Your initial down payment cannot exceed the cost of two months’ coverage.  For a 12-month policy, you have the right to pay the balance in at least ten equal monthly installments.  For a six-month policy, you have the right to pay the balance in at least four equal monthly installments.

NOTE:  You may be offered an installment loan through a premium finance company.  These companies offer high-interest loans with fees and obligations that may be beyond those included in installment plans offered directly by insurance companies. 

8. If you authorize your insurer to withdraw your premium payments directly from your financial institution, your insurer cannot increase the amount withdrawn unless:

• the insurer notifies you of  the premium increase at least 30 days prior to its effective date and provides a postage paid form you can use to object to the increase; and
• you do not notify the insurer or financial institution that you object to the increase at least 5 days prior to the increase.
• This does not apply to premium increases specifically scheduled in the original policy, to increases based on policy changes you request, or to an increase that is less than $10 or 10% of the previous month’s payment.  

Discounts

9. Your insurance company must give you discounts for the following:

• Two or more autos - 20% discount on your liability, medical payments, and personal injury protection coverages and 15% discount on your collision coverage, applied to each type of coverage you have on more than one auto (unless you obtained your coverage through the Texas Automobile Insurance Plan Association or one of the cars is operated by a male driver under 25 years of age or unmarried female under age 21);
• Air bags or seat belts - 30% discount on your personal injury protection and medical payments coverages if your auto has air bags or automatic seat belts protecting all front seat occupants or 15% discount if the air bag or automatic seat belt only protects the driver;
• Anti-theft devices - a discount on your comprehensive coverage that varies from 2% to 30% depending on where you live and the type and number of qualifying devices installed on your vehicle which help prevent vandalism to or theft of the vehicle.
• Defensive driving course -10% discount on your liability, medical payments, personal injury protection, and collision coverages for completion of a defensive driving course within the last three years.  This discount cannot be applied concurrently with the driver’s education discount on any one auto;
• Driver’s education - 10% discount on your liability, medical payments, personal injury protection, and collision coverages for completion of a driver's education course by a male driver under 25 years of age or unmarried female under age 21. This discount cannot be applied concurrently with the defensive driving discount on any one auto; and
• Alcohol and drug awareness course - 5% discount on your liability, medical payments, personal injury protection, and collision coverages for completion of an alcohol and drug awareness course within the last 3 years.  Those convicted of DWI or minor in possession are not eligible for this discount for 7 years from the date of the conviction.

If your insurance company is a “county mutual,” you may or may not be offered these discounts, and if offered, the amount of the discount is determined by the company and may be different from the percentages listed above.

Cancellation of Your Policy and Refusal to Renew Your Policy

Cancellation means that before the end of the policy period the insurance company:

• terminates the policy; 
• reduces or restricts coverage under the policy; or
• refuses to provide additional coverage to which you are entitled under the policy.

Refusal to renew and non-renewal mean the policy terminates at the end of the policy period.

The policy period is shown on the declarations page at the front of your policy.

10. After your initial policy with your company has been in effect for 60 days, that insurance company cannot cancel your policy unless:

• you don’t pay your premium when due;
• you file a fraudulent claim;
• your driver’s license or car registration is revoked or suspended; 
• the driver’s license of any household resident or person who customarily drives a covered auto is suspended or revoked.  If you agree to exclude coverage for that person, the insurance company cannot cancel your policy for this reason; or
• TDI determines continuation of the policy would result in violation of insurance laws.  

11. To cancel your policy, your insurance company must mail you at least 10 days notice of the cancellation.

12. Your insurance company cannot refuse to renew your policy solely because of any of the following types of claims:

• claims involving damage from a weather-related incident that does not involve a collision, like damage from hail, wind or flood;
• accidents or claims involving damage by contact with animals or fowls;
• accidents or claims involving damage caused by flying gravel or flying objects; however, if you have three of these claims in a three year period, the insurance company may raise your deductible on your next renewal date;
• towing and labor claims; however, once you have made four of these claims in a three year period, the company may eliminate this coverage from your policy on your next renewal date; and
• any other accident or claim that was not your fault unless you have two or more of these claims or accidents in a one year period.

13. If the term of your insurance policy is less than one year, your insurance company must renew that policy until it has been in effect for one year. Your insurance company may only refuse to renew your policy effective on the anniversary of the policy's original effective date.  For instance, if your policy was originally effective on January 1, 2000, the insurance company must renew your policy to provide coverage until January 1, 2001 and thereafter, may only refuse to renew your policy effective January 1 of any year. 

14. You have the right to cancel your policy at any time and receive a refund of the remaining premium.  The refund will be paid to you unless your premium was financed through a premium finance company.  In that case, the refund will be paid to the premium finance company to reduce the amount you owe on your loan.

15. If the insurance company does not mail you notice of non-renewal at least 30 days before your policy expires, you have the right to require the insurance company to renew your policy. 

16. Upon request, you have the right to a written explanation of an insurance company's decision to cancel or non-renew your policy.  The written statement must fully explain the decision, including the precise incidents, circumstances, or risk factors that disqualified you.  It must also state the sources of information used.

17. If your marital status changes, you have the right to continue your insurance coverage.  You have a right to a new policy in your name that has coverages which most nearly approximate the coverages of your prior policy, including the same expiration date.  The insurance company cannot date the new policy so that a gap in coverage occurs.

18. Your insurance company cannot refuse to renew your policy based solely on the age of any person covered by the policy.  This includes placing you in a higher priced company or requiring a named driver exclusion for a teenager who reaches driving age. 

Claims

19. You have the right to be treated fairly and honestly when you make a claim.  If you believe an insurance company has treated you unfairly, call the Department of Insurance at 1-800-252-3439 (463-6515 in Austin) or download a complaint form from the TDI website at http://www.tdi.state.tx.us.  You can complete a complaint form on-line via the Web or fax it to TDI at 512/475-1771.

20. You have the right to reject any settlement amount, including any unfair valuation, offered by the insurance company.

21. Your insurance company must tell you in writing why your claim or part of your claim was denied.

22. When you file a claim on your own policy, you have the right to have your claim processed and paid promptly.  If the insurance company fails to meet required claims processing and payment deadlines, you have the right to collect 18% annual interest and attorney's fees in addition to your claim amount.

Generally, within 15 calendar days, your insurance company must acknowledge receipt of your claim and request any additional information reasonably related to your claim.  Within 15 business days, after receipt of all requested information, the company must approve or deny your claim in writing.  The law allows the insurance company to extend this deadline up to 45 days if it notifies you that more time is needed and tells you why.

After notifying you that your claim is approved, your insurance company must pay the claim within 5 business days.

If your claim results from a weather-related catastrophe or other major natural disaster as defined by TDI, your insurance company may take 45 additional days to approve or deny your claim and 15 additional days to pay your claim.

23. You have the right to choose the repair shop and replacement parts for your vehicle.  An insurance company may not specify the brand, type, kind, age, vendor, supplier, or condition of parts or products used to repair your automobile.

The insurance company must provide you notice of the above requirements as follows:

• claims submitted by telephone – written notice within 3 business days or immediate verbal notice, followed by written notice within 15 days;
• claims submitted in person - immediate written notice at the time you present your vehicle to an insurer or an insurance adjuster or other person in connection with a claim for damage repair;
• claims submitted in writing - written notice must be provided within 3 business days.  

24. If another person is liable for damage to your auto and you filed a claim and paid a deductible on your own policy, your insurance company must make a reasonable and diligent effort to recover the deductible from that person within twelve months from the date your claim is paid.  If not, your company must:

• authorize you, at least 90 days prior to the expiration of the statute of limitations, to pursue your own collection efforts, or 
• refund your deductible.  

25. Your insurance company must notify you if it intends to pay a liability claim against your policy.  The company must notify you in writing of an initial offer to compromise or settle a claim against you no later than the 10th day after the date the offer is made.  The company must notify you in writing of any settlement of a claim against you no later than the 30th day after the date of the settlement. 

26. You have the right to refuse to provide your insurance company with information that does not relate to your claim.  In addition, you may refuse to provide your federal income tax records unless your insurer gets a court order or your claim involves lost income or a fire loss. 

Discrimination

27. An insurance company cannot discriminate against you by: 

• refusing to insure you or offering you different terms, conditions or benefits because of your race, color, sex, marital status, religion, or national origin.
• determining your rate based on your race, color, religion, or national origin.
• refusing to renew your policy because of your race, color, religion, marital status, sex, age, or national origin.  

28. Unless justified by actual or anticipated loss experience,

• an insurance company cannot refuse to insure you, or offer you different terms, conditions, or benefits because of a disability or partial disability or where you live.
• an insurance company cannot determine your rate based on your sex (unless you are a male under 25 or an unmarried female under 21), age (unless you are 65 or older, a male under 25, or an unmarried female under 21), marital status (unless you are a male under 25 or an unmarried female under 21) or disability or partial disability, or where you live.
• an insurance company cannot refuse to renew your policy because of your disability or partial disability or where you live. 

Enforcing Your Rights

29. You have the right to complain to TDI about any insurance company and/or insurance matter and to receive a prompt investigation and response to your complaint.  To do so, you should:

• call TDI’s Consumer Help Line at 1-800-252-3439, in Austin 463-6515; Servicio en español;
• write to the Texas Department of Insurance, Consumer Protection (111-1A), P.O. Box 149091, Austin, Texas 78714-9091;
• e-mail TDI at ConsumerProtection@tdi.state.tx.us; 
• fax your complaint to (512) 475-1771; 
• download or complete a complaint form on line from the TDI website at http://www.tdi.state.tx.us, or WOSG-modem: 1-800-227-8392, in Austin 475-1051; or
• call the TDI Publications/Complaint Form order line (24 hours) at 1-800-599-SHOP (7467), in Austin 305-7211.

NOTE: TDI offers interpreter services and publications in alternate formats. Persons needing more information in alternate layouts or languages can call the TDI Consumer Help Line listed above. 

30. If an insurance company violates your rights, you may be able to sue that company in court, including small claims court, with or without an attorney.

31. If you sue to recover under your insurance policy, the insurance company has the burden of proof as to any application of an exclusion in the policy and any exception to or other avoidance of coverage claimed by the insurer. 

32. If you file a claim under your comprehensive or collision coverage, you have the right to demand appraisal to resolve a dispute over the amount of your property loss.  Your insurance company also has the right to demand appraisal.  In either case, you must pay a portion of the costs of the appraisal.  The appraisal decision is binding on you and your insurance company as to the amount of the loss only.

33. You have the right to ask in writing that TDI make or change rules on any automobile insurance issue that concerns you.  Send your written request to:  Texas Department of Insurance, Attn: Commissioner (113-2A), P.O. Box 149104, Austin, TX 78714-9104. 

11 Ways To Save Money On Your Car Insurance

The Circle Of Safety: How Do You Get The Most For Your Money?  11 Ways To Save Money On Your Car Insurance.

Post By: Insurance Top Stories

So you’re shopping around for auto insurance. What do you need to know? Well, there are lots of ways – at least 11 – that you can save money. Many of these money-saving ideas may apply to you.

1. One Insurer, Multiple Policies – Do you have a homeowners or renters insurance policy? If so, is it with the same insurance company that provides your auto insurance? If the answer is no, you’re paying too much – for both policies. Almost every insurance company that sells auto insurance wants its policyholders to also buy homeowners or renters insurance from that company.

These insurers offer so-called multi-policy discounts. Usually, these discounts are at least 10% and some insurers apply the discounts to both the auto and the homeowners/renters policy.

Tip:  Talk to your agent about multi-policy discounts.

2. Good Driver, Good Price? – It’s no secret that the better your driving record, the less you will pay for auto insurance. But did you know that most people qualify as “good drivers” and are eligible for discounted premiums? Some good drivers pay a lot more than others, however.

Many auto insurers are actually a collection of several insurance companies in which each caters to a certain type of driver. The worst drivers go in one company, the best in another, and a lot of people wind up in one of the middle companies.

These middle people pay less than the worst drivers, but more than the best. The thing is, many of these middle people have driving records that are just as good as those who are insured by the companies that offer the lowest rates. Yet these middle people are paying more. Why?

The usual reason is that they don’t know any better. No one told them which insurance company in the group had the best prices. And, probably, no one told them there was even a group of insurance companies. If you have a spotless driving record, there’s no reason you shouldn’t be paying the lowest price a group of insurance companies has to offer.

Tip:  Make sure you’re getting the best discount for your driving record.  Talk to your agent.  And remember, be a safe driver.  It will save you money.

3. The Beauty of the Bus (or Other Mass Transit) – Do you drive to and from work? If you do, you are literally paying a premium to do so. Insurance companies charge you significantly higher premiums if you drive to work. And, the longer your commute (in miles, not minutes), the higher the premium.

Tip:   Some drivers should consider mass transit. Yes, there’s a price there, too. But you will reap the savings of gas and lower insurance costs.

4. Low Mileage, Low Price – On average, people drive 1,000 to 1,250 miles a month. That is what insurance companies consider average use.

Tip:   If you drive less than the average, you could be eligible for low-mileage discounts, which some insurers offer.

5. High-Profile, High-Cost – The type of car you drive is a major factor in what you pay for insurance. Is your vehicle a magnet for thieves? Is it more expensive to repair than most cars? If the answer to either of the last two questions is yes, you’re paying more than the average car owner for insurance.

Note:  To get detailed information on your vehicle(s) – or a vehicle you’re thinking of buying – write to the Insurance Institute for Highway Safety at 1005 North Glebe Rd., Arlington, VA 22201 and ask for the “Highway Loss Data Chart.”

6. Raise Your Deductible – The deductible is the amount you pay before insurance kicks in if you have a claim. For example, if you have a $250 deductible and you have an accident in which your car sustains $1,000 in damage, you pay the first $250 and your insurer pays the balance, $750. The lower the deductible you choose, the more you pay. If you have assets, you can probably afford to absorb at least $250 and probably $500 if you have a claim.

Tip:  If it’s been years since you’ve had an accident, you may be better off raising your deductible and paying less each year for insurance.

7. Drop Unnecessary Coverages – Let’s say you have an older car, one not worth very much. There’s really little point in having collision and comprehensive coverages. You don’t have much to protect. Remember, too, that you have to subtract your deductible from any potential payout you might get.

Tip:  As a general rule, any car worth less than $1,000 shouldn’t have collision and comprehensive coverage. Between the deductible and the extra expense of these coverages, the cost is probably greater than the benefit. How much is your car worth? An auto dealer can tell you, or there are plenty of books that have values of vehicles going back many, many years.

8. Discounts, Discounts, Discounts – Auto insurance companies offer several discounts for a variety of reasons. The car has automatic seat beats, air bags, anti-lock brakes, anti-theft devices, etc. The driver is a good student, which is especially valuable if you have teenage children who will be on your policy.

Tip:  Make sure you are taking advantage of all the discounts available to you!


9. Taking the Defensive – Many insurance companies also offer discounts to those who have taken defensive driving courses recently.

10. Low-Cost and High-Cost Areas – Are you planning to move? If you are, you should take into account the cost of insurance. Generally, the more urban the area, the higher the premium. The costs can vary even within a community.

Fact:  Rates can really vary from state to state. If you’re living in New Jersey, Massachusetts or Hawaii, you’re paying several times more, on average, than you would in North Dakota, South Dakota or Idaho.

11. Credit Where Is (Or Is Not) Due – Is your credit record better than your driving record? If you have a good credit record, you could be eligible for discounted premiums from several auto insurance companies.

Fact: Many insurers now use your credit history as a major factor in determining what to charge you for auto insurance. In some cases, with some companies, you could save money by shifting your business to an insurer that uses credit as a rating factor – even if you have a so-so or poor driving record. There is another side to this coin. If you have a poor credit history, you could save money by moving your auto insurance to a company that does not use credit as a rating factor. Many insurers do not use credit as a factor. 

Tip:  Regardless of your credit status, you should talk to your agent to make sure you have the best situation given your credit record, good or bad.


Whatever your driving record or coverage needs, you should shop around, or let an experienced insurance professional shop around, for the best deal for you. There are literally thousands and thousands of coverage options from hundreds and hundreds of insurance companies.

In addition, not only should you try to get the best deal you can, you also need to make sure you have all the coverage you want/need. Using an Independent Insurance Agent is usually your best bet to get the most value for your auto insurance dollar.

7 Interesting Auto Insurance Facts

7 Interesting Auto Insurance Facts

Post By: Insurance Top Stories

Comprehensive coverage doesn’t mean complete coverage.
While comprehensive coverage may sound like coverage that will cover you in every situation, this is certainly not the case. Comprehensive coverage simply means you are covered in scenarios other than collisions. Theft, flooding, vandalism, and fire damage are examples of when comprehensive coverage will help you.

Your car effects your rates.
The car you drive greatly effects what you will have to pay to get your car covered. If you have a fast, small car you will probably find yourself paying a higher premium for your auto insurance. On the other hand, if you are driving a mid-sized car with all the safety features, your rates will be significantly lower.

Your credit score effects your rates.
This may sound a little strange at first, but it is an effective way for auto insurance companies to judge one’s responsibility. Not only does is this a good indicator of if you will pay on time or not, but it is also an effective judge of character, something auto insurance companies find very important.

The higher your deductible the better.
If you believe you are a good driver, a high deductible may be a good choice for you. A deductible is what you have to pay out of pocket in case of an accident before the auto insurance kicks in. It’s best to choose the highest deductible you believe you can afford at any given time. Doing so will greatly reduce your premium.

Pay semi-annually rather than monthly.
If you are willing to pay 6 months in advance, or even a year in advance, for your auto insurance coverage, you will be able to save a great deal.

Letting your policy lapse can be costly.
When a insurance company sees a someone that has been driving without auto insurance, especially since it is required by state law, they will consider you irresponsible, and often times they will make you pay for it. If you are switching companies, make sure you have a replacement set up the day your current policy expires to avoid extra charges.

You can ask for discounts.
Before signing for auto insurance with a particular company, don’t be afraid to ask for discounts. You’d be surprised what discounts you qualify for. You may even be able to get a discount just for asking.

Term Used About Insurance

Insurance Term Used

Post By: Insurance Top Stories

1) Insurance
Acceptance of the risk of a potential loss from a policyholder;

2) Reinsurance
Acceptance of ceded risks from an insurance merchant, a reinsurance merchant or a private pension fund;

3) Ceded Reinsurance
Transfer of insurance risks to an insurance or reinsurance merchant;

4) Retrocession
Transfer of reinsurance risks to an insurance or reinsurance merchant;

5) Insurance Company
A joint stock company registered in the Republic of Latvia, or the European company (Societas Europaea), or mutual insurance cooperative society, which may pursue insurance under this Law;

6) Reinsurance Company
A joint stock company or a limited liability company registered in the Republic of Latvia, or a European company, which may pursue reinsurance under this Law;

7) Captive Insurance Company
An insurance company, owned either by a financial merchant other than an insurance or reinsurance merchant, or a group of insurance or reinsurance undertakings or the non-financial merchant thereof, and the purpose of which is to provide insurance cover exclusively for the risks of the merchant or undertakings which own it, or of the merchant or undertakings of the group of which the captive company merchant belongs;

8) Captive Reinsurance Company
A reinsurance company, owned either by a financial merchant other than an insurance or reinsurance merchant, or by a group of insurance or reinsurance undertakings, or by the non-financial merchant thereof, and the purpose of which is to provide reinsurance cover exclusively for the risks of the merchant or undertakings which own it, or of an merchant or undertakings of the group to which the captive reinsurance company belongs;

9) Insurer
An insurance company or a branch of a Member State or non-Member State insurer, which has the right to pursue insurance under this Law;

10) Reinsurer
A reinsurance company or a branch of a Member State or non-Member State reinsurer, which may pursue reinsurance under this Law;

11) Member State Insurer
An insurance company which is registered in a Member State other than the Republic of Latvia and which may pursue insurance in the country of its domicile;

12) Member State Reinsurer
A reinsurance company which is registered in a Member State other than the Republic of Latvia and which has the right to pursue reinsurance in its home country;

13) Non-Member State Insurer
An insurance company which is registered in a country other than the Member States and which has the right to pursue insurance in its home country;

14) Non-Member State Reinsurer
A reinsurance company which is registered in a country other than the Member States and which has the right to pursue reinsurance in the country of its domicile;

15) Insurance Merchant
A legal person which may pursue insurance in a Member State;

16) Reinsurance Merchant
A legal person which may pursue reinsurance in a Member State;

17) Insurance Licence
Authorisation to pursue the insurance activity;

18) Reinsurance Licence
Authorisation to pursue the insurance activity;

19) Insurance Holding Company
A parent company which is not a mixed financial holding company and the core activity of which is to acquire and have a holding in subsidiaries, if at least one subsidiary company is an insurance or reinsurance merchant, whereas the other subsidiary companies are:
 a) Only insurance or reinsurance undertakings or non-Member State insurers or reinsurers, of which at least one is an insurance or reinsurance merchant,
 b) Mainly (according to the most recent approved annual report the total assets or income of insurance companies, reinsurance companies, Member State or non-Member State insurers and Member State and non-Member State reinsurers is more than half of the total assets or income of all the subsidiary companies controlled by the parent company) insurance or reinsurance undertakings or non-Member State insurers or reinsurers, from which at least one is an insurance or reinsurance merchant;

20) Mixed Activity Insurance Holding Company
A parent company that is not an insurance or reinsurance merchant, non-Member State insurer or reinsurer, an insurance holding company or a mixed financial holding company, however, at least one of the subsidiary companies of which is an insurance or reinsurance merchant;

21) Branch Of An Insurance Company
A branch of an insurance company established and registered outside the Republic of Latvia, which acts on behalf of the insurance company;

22) Branch Of A Reinsurance Company
A branch of a reinsurance company established and registered outside the Republic of Latvia, which acts on behalf of the reinsurance company;

23) Branch Of A Member State Insurer
A branch of the Member State insurer, which is established and registered in the Republic of Latvia;

24) Branch Of A Non-Member State Insurer
A branch of the non-Member State insurer, which is established and registered in the Republic of Latvia;

25) Branch Of A Member State Reinsurer
A branch of the Member State reinsurer, which is established and registered in the Republic of Latvia;

26) Branch Of A Non-Member State Reinsurer
A branch of the non-Member State reinsurer, which is established and registered in the Republic of Latvia;

27) Home Member State
The Member State in which:
 a) The place of management (the seat of the company) of the insurance merchant or non-Member State insurer is situated;
 b) The place of management (the seat of the company) of the reinsurance merchant is situated.

28) Host Member State
A Member State other than the home Member State and in which:
 a) The insurance or reinsurance company has a branch,
 b) The insurance or reinsurance company provides services under the freedom to provide services principle, without opening a branch;

29) Member State
A Member State of the European Union or the European Economic Area;

30) Country In Which The Insured Objects Related To The Insurance Risk Are Located
 a) A country where the insured immovable property or the assets (property) therein are located if the relevant immovable property and the assets located therein are insured under the same insurance contract,
 b) The country of registration of a vehicle if a vehicle of any kind is insured,
 c) A country in which a policyholder has concluded an insurance contract for a term of up to four months insuring any travelling related risk, and
 d) In all other cases not mentioned in Sub-clauses ‘a’, ‘b’ and ‘c’ hereof, the country of permanent place of residence of the policyholder or, if the policy holder is a legal person, the country in which the structural unit thereof to which the insurance contract applies is located;

31) Outsourced Service
A service specified in this Law, the provision of which the insurance or reinsurance company delegates to the provider of outsourced services based on a written agreement for the outsourced service;

32) Stress Test
An analysis carried out by an insurance or reinsurance company to determine and assess the likely impact of various exceptional, however, possibly unfavourable events or changes to market conditions on the ability of an insurance or reinsurance company to fully perform its obligations arising from insurance and reinsurance contracts and ensure the financial standing thereof;

33) Control
A person has control over a commercial company if:
 a) Such a person has a decisive influence in the commercial company based on the holding thereof;
 b) Such a person has a decisive influence in the commercial company on the basis of a contract between a group of companies; or
 c) Any other relationship similar to that referred to in Sub-clause “a” or “b” hereof exists between such a person and the commercial company;

34) Qualifying Holding
Directly or indirectly obtained holding by a person or several persons who take concerted action based on an agreement, and such a holding is 10 per cent or more of the share capital or of the shares carrying voting rights of the commercial company, or provides the opportunity to significantly influence the development of the financial and operational policies of the commercial company;

35) Close Links
Relationship between two or more persons:
 a) By holding – a person directly or by means of control has 20 or more per cent of voting rights in the commercial company, or a person directly or by control has acquired a holding that includes 20 or more per cent of share capital or of shares carrying voting shares,
 b) By control,
 c) If these are related to the same person by control;

36) Parent Company
A commercial company that controls another commercial company. For the purpose of the supervision of the groups of insurance and reinsurance companies a commercial company which under the assessment by the Financial and Capital Market Commission (hereinafter - the Commission) has a decisive influence shall also be considered a parent company;

37) Subsidiary Company
A commercial company that is controlled by another commercial company. A subsidiary company of any subsidiary company shall be considered the subsidiary company of the parent company thereof. For the purpose of the supervision of a group of insurance and reinsurance companies a commercial company in which under the assessment by the Commission a parent company has a decisive influence shall also be considered a subsidiary company;

38) Participation
Ownership of 20 per cent or more of the voting rights in another commercial company acquired directly or by control, or a holding of 20 per cent or more of the share capital or of the shares carrying voting rights of another company, acquired directly or by control, acquired by a commercial company. For the purpose of the supervision of a group of insurance and reinsurance companies participation shall also be a direct or indirect holding or voting rights in the share capital of a commercial company, as a result of which, under the assessment of the Commission, the commercial company has a decisive influence in another commercial company.;

39) Participating Company
A parent company or a commercial company, which has acquired participation in a commercial company, or a commercial company whose links to a commercial company are manifested as the joint management of these companies under the concluded agreement or the foundation document of these commercial companies, or the provisions of their articles of association, or owing to the fact that during the financial year at least half of the members of any management body were the same persons;

40) Associated Company
A subsidiary company or a commercial company, in which participation has been acquired, or a commercial company whose links to a commercial company are manifested as the joint management of these companies under the concluded agreement or the foundation document of these commercial companies, or the provisions of their articles of association, or owing to the fact that during the financial year at least half of the members of any management body were the same persons;

41) Group
A group of commercial companies:
 a) Consisting of a participating company, its subsidiary companies and commercial companies, in which the participating companies or the subsidiary companies thereof have participation, as well as commercial companies linked to the participating company, the subsidiary thereof or a company in which the participating company or the subsidiary company thereof has participation, manifests itself as joint management of these companies under the concluded agreement or the foundation documents of these commercial companies, or the provisions of their articles of association or owing to the fact that during the financial year at least half of the members of any management body were the same persons;
 b) Which is based on establishing firm and sustainable contractual relations or financial relations of another kind between these commercial companies and which can include mutual insurance cooperative companies, if one of these commercial companies has, through centralised coordination, decisive influence over the decision-making of the commercial companies united in the group, including financial decisions, and the establishing or termination of such relations have been approved, for the purpose of the supervision of the group, by the supervisory authority of the group. The commercial company engaged in such centralised coordination shall be considered a parent company, whereas the other commercial companies shall be considered subsidiary companies;

42) Financial Merchant Is
 a) A credit institution, financial institution within the meaning of the Credit Institution Law or a commercial company whose core activity is the buying or management of immovable property, provision of data processing services or any other similar activity that supplements the basic activity of one or several credit institutions,
 b) An insurance or reinsurance merchant or an insurance holding company,
 c) An investment firm or financial institution within the meaning of Article 4, Paragraph 1, Sub-paragraph 26 of Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012 (Text with EEA relevance),
 d) A mixed financial holding company;

43) Supervisory Authority
An authority of a Member State or a non-Member State which is conferred with the statutory right to carry out the supervision of Member State insurers, Member State reinsurers, non-Member State insurers, and non-Member State reinsurers;

44) Free Capital
The value of assets owned by a person, which is reduced by the value of liabilities of the person and the value of such assets, which are considered to be long-term investments;

45) Technical Provisions
The sum of the best estimate of technical provisions and the risk margin;

46) Fund Participant
A commercial company which may pursue insurance under this law, and branch of a Member State or non-Member State insurance which makes payments into the Insured Protection Fund;

47) Competent Authority
A court, liquidator, administrator and another institution or a person who pursuant to its statutory powers adopts decisions on reorganisation measures or winding-up, carries out reorganisation measures or winding-up, or supervises the course of reorganisation measures or winding-up;

48) Reorganisation Measures
Legal acts carried out in respect of the insurance merchant or the branch of a non-Member State insurer which injure or might injure the rights of the third parties and which are carried out in order to preserve or restore the solvency of the insurance merchant or the non-Member State insurer, and which have an impact on the existing rights of any such party, which itself is not an insurance company or branch of a non-Member insurer;

49) Netting Of Claims And Liabilities
Legal relations established between a debtor and a creditor under a written agreement after the commencement of the winding-up of a debtor or declaration of the insolvency thereof to aggregate the claims and liabilities arising from mutual contracts into a single claim or liability so that only a single claim is brought and only a single obligation shall be performed;

50) Cancellation Of Claims And Liabilities
Complete mutual cancellation of the claims and liabilities of the debtor and creditor arising from the contract after the commencement of the winding-up of a debtor or declaration of the insolvency thereof regardless of the amount (sum) of claims and liabilities;

51) Function
Administrative capacity to carry out the objectives of the system of system of governance laid down in this Law. The system of governance includes the risk management function, compliance function, internal audit function and actuarial function;

52) European Insurance And Occupational Pensions Authority (Hereinafter EIOPA)
The body established in accordance with Regulation (EU) No. 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision 716/2009/ECK and repealing Commission Decision 2009/79/EC (hereinafter — EU Regulation No. 1094/2010);

53) Supervisory Authority Of The Group
A Member State supervisory authority carrying out the supervision of the group, managing the college of supervisors and arranging for the work thereof;

54) College Of Supervisors
An advisory co-operation unit established by the supervisory authorities of Member States, which operates on the basis of the cooperation agreement between the supervisory authorities involved;

55) Principle Of Proportionality
Application of the requirements of this Law and supervisory measures pursuant to the type and scale of activity of an insurance or reinsurance company, and the complexity of the risks inherent to the activity of insurance or reinsurance companies.

Adding Value to AXA Irish Experience Insurance Products

Adding value to insurance products: the AXA Irish experience

Post By: Insurance Top Stories

While competition within car and home insurance increases through more players and also unfamiliar entrants to the market (supermarkets), the purpose of this paper is to report on a study of one large insurer in Ireland which attempts to differentiate itself from its peers.

1. Introduction 
Like any service brand, insurance companies are adopting techniques that have traditionally been employed for fast moving consumer goods to differentiate themselves in a homogeneous market (McDonaldet al., 2001). Simplicity of insurance products (Devlin, 2001) and technology improving the quality of the sales process (de Chernatony and SegalHorn, 2003; Yanget al., 2004) are patterns that have revolutionised the industry.

Improvements in technology and communications are also changing distribution channels, allowing underwriters to bypass traditional intermediaries like insurance brokers (Debling, 1998). Alongside this, new entrants, like strong brands from different industries, are entering unfamiliar markets, like insurance. For example, supermarkets are offering financial services (Hatch and Schultz, 2003). New technologies and distribution channels are creating an environment in which branding becomes more important while, at the same time, consumers are becoming increasingly sophisticated about the relationship between brand promise and performance (Schreuer, 2000). Hellieret al.(2003) found that customer loyalty may not be an important intervening factor between customer satisfaction and brand preference.

Adding Value to Insurance Products

Executive summary and implications for managers and executives. This summary has been provided to allow managers and executives a rapid appreciation of the content of this article. Those with a particular interest in the topic covered may then read the articlein tototo take advantage of the more comprehensive description of the research undertaken and its results to get the full benefits of the material present.

Post By: Insurance Top Stories

Increased competition and technological developments have transformed numerous industries in recent times. The insurance sector is no exception and the introduction of techniques more commonly associated with fast moving consumer goods is one of the more notable changes.

Many companies have exploited new communication methods to introduce business models which are less reliant on insurance brokers and other “traditional intermediaries”. It has become the norm for major underwriters to create networks of branches that provide a direct service. Dealing with the customer directly has also become the focus for some leading firms that promise such as more “convenience, speed and value” to the consumer. The growth of internet business models has been explored by researchers who found that the online organisation’s corporate brand image is determined by how customers evaluate its performance with regard to factors including security, customer care, personalisation of service and user-friendliness.

The entrance of powerful brands from other sectors has likewise altered the competitive picture. Leading supermarkets are a prime example of companies extending into the insurance sector, often partnering various financial institutions that provide the relevant knowledge and experience of the product category. Termed, “brandassurers”, the appeal to customers is the satisfaction that comes with dealing with reputable brands that are trustworthy. The anticipation that the retailer will offer a convenient method of delivering a dependable service product that is inexpensive balanced against alternatives increases the attraction.

AXA Travel Insurance

Similar alliances with the banking sector are also in operation. Banks place a strong emphasis on customer service and secure loyalty in return. The renowned ability to sell is the contribution of insurance firms to a model labelled “bancassurance” that initially emerged during the 1980s in response to the impact of legislator changes and market developments on the financial landscape.

Such bancassurance initiatives are evident in Ireland, where motor insurance in particular has been subject to various new regulations over the years. Both domestic governments and European Union (EU) rulers have introduced various acts and laws which have made certain types of insurance cover compulsive. At the same time, customers have been given the option to select policies that offer more comprehensive protection.

The chance to earn a no claims bonus is a feature of most private motor policies sold in Ireland. Risk is usually calculated on the basis of driver age, type and size of vehicle, and location, although customers receive a discount on their premium for not making a claim. Since these characteristics are fairly standard, it is a considerable challenge for insurance operators to differentiate their largely homogenous product offerings to consumers whose ultimate purchase decisions are determined by price. Complimentary cover to such as windscreens, breakdown assistance and protection of no claims are among the common measures introduced.

Similar practices are typical where household insurance is concerned. Bundling contents cover with buildings cover is one frequently used initiative. Extra protection for such as personal accident and freezer contents is among other measures used by firms aiming to distinguish themselves from rival operators.

French insurer AXA has become one of the largest insurers in the Irish market. It is a leading provider of motor insurance in the country and in 2009 captured 19 per cent of total policy income in the sector. The firm specializes in this area and also provides insurance for taxis and other commercial motors. It likewise offers cover in niche areas like classic car, motor fleets and bus and coach. Household insurance is another of its largest products.

AXA entered Ireland in 2000 when acquiring the GRE PMPA insurance organisation, the company formed when British insurer Guardian Royal Exchange purchased PMPA in 1989. Widespread rebranding carried out by AXA resulted in the GRE and PMPA brands vanishing early in the current millennium. The company distributes its products through the established means of insurance brokers and direct channels. In addition, AXA utilizes different methods which include a bancassurance partnership with Allied Irish Bank for home insurance provision. Insurance products are now also available through the company’s website.

Sustaining its position of strength in the market has been helped by the various strategies introduced to successfully differentiate AXA products from those of its rivals. Consumers are particularly enticed by the prospect of acquiring a no claims bonus for motor insurance which can reach 70 per cent of the premium if no claims are made. The normal discount in Ireland is 50 per cent after 5 years. AXA also now allows certain policyholders to receive comprehensive cover when driving other cars, instead of the customary practice of issuing only third-party cover in these circumstances. Offering this superior cover has proved another vote winner among customers, who can increase their premium slightly to receive additional features on their policy. This “Extra Benefits” option gives added security in the shape of enhanced windscreen cover and the option to hire a replacement vehicle should an accident or claim occur.

The unique approach by AXA is illustrated by its AXA Plus loyalty scheme, launched in 2005. Initially targeting direct customers, the company soon extended the opportunity to those acquired through insurance brokers. Policyholders receive a personalised membership card and information about the range of discounts offered. A dedicated company website supports the program and provides further details about the benefits, which are arranged into motor, home, travel and leisure categories. Within each category, customers can obtain a host of discounted products and other extras.

Incorporated in the scheme is AXA Leisure Breaks, allowing members of AXA Plus unique access to various holidays and themed breaks in Ireland and the UK (UK). An AXA credit card is available too and those who use the card are able to earn reward points that can be offset against their next renewal premium. Although comparisons can be made with other major loyalty cards such as Tesco and Nectar, Brophy points out that all customers are entitled to the same benefits without needing to make further purchases as is usually the case with other programs.

Earlier research identified that customer satisfaction in Irish financial services is generated by the brand, together with transactional and relationship elements. These factors determine both good and bad aspects of the overall experience. Insurance is perceived by most consumers as a necessary evil, therefore purchase is made somewhat begrudgingly. It has been indicated previously that people are also negative when extra effort is needed to process information about the available products. The author points out that AXA has noted this and consequently deploys a customer relationship management (CRM) strategy that is simplified and straightforward to manage. Its selected partners for AXA Plus help reinforce the insurer’s brand values in a loyalty scheme that has helped retain customers in a market where price sensitivity is particularly strong. The loyalty program has proved a “unique selling point” that has enabled AXA to secure first mover advantage over other providers. This success has prompted the company to launch AXA Plus in places like the UK, North America and various other markets where the firm has established a presence.



To cite this document:
Richard Brophy, (2013) "Adding value to insurance products: the AXA Irish experience", Journal of Product & Brand Management, Vol. 22 Issue: 4, pp.293-299, doi: 10.1108/JPBM-09-2012-0183