Category Archives: Insurance industry

Insurance is failing hurricane survivors: ‘People thought they were covered’

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Flooding is separate from typical US home insurance and many homeowners are not adequately covered

As millions of US residents begin working to file insurance claims on their homes in the aftermath of Hurricanes Helene and Milton, many could be denied, particularly if their homes were damaged by flooding.

A quirk in the US home insurance market is that flood insurance is separate from typical home insurance, which usually covers wind damage from hurricanes but not flooding. Homeowners must purchase flood insurance separately if they want their homes protected against flooding.

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Vehicle damage claims in Wales fall 20% since speed limit cut to 20mph, says insurer

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Campaigners say lower speeds reduce casualties but scheme has since been amended to give people more choice to rescind limits

Vehicle damage claims in Wales have fallen by 20% at one leading car insurer since the nationwide 20mph speed limit was introduced there last September.

Wales was one of the first countries in the world, and the first nation in the UK, to introduce legislation for a default 20mph speed limit in built-up areas last year.

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Average cost of UK car insurance rises by one-third in a year, analysis finds

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ABI reports annual jump of £157 in first quarter of 2024 but says 1% increase on previous quarter indicates rises are easing

The average price paid for comprehensive motor insurance in the UK was about a third (33%) or £157 higher in the first quarter of this year than a year earlier, according to figures from the Association of British Insurers (ABI).

Based on analysis of policies sold, the typical price paid in the first quarter of 2024 was £635, marking a 1% increase on the previous quarter, the ABI said.

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UK weather-related insurance claims reach record £573m

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Flood and frozen pipe damage caused by series of storms, says Association of British Insurers

Storms and heavy rain pushed up weather-related home insurance claims in the UK by more than a third last year to a record £573m, according to industry data.

The repair bill for storm damage and other extreme weather during 2023 was £150m more than in 2022, the Association of British Insurers said, contributing to an overall 10% rise in residential property claims settled last year.

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Forgiving medical debt after it is sent to collections has fewer benefits – study

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Experts partnered with RIP Medical Debt, a medical non-profit that buys and forgives debt, found it had little effect on people’s credit scores and mental health

Medical debt is the most common form of debt in collections in the US. But forgiving that debt once it has gone to collections may provide fewer health and financial benefits than once hoped.

A new study by researchers who partnered with RIP Medical Debt, a non-profit that buys and forgives medical debt, found “disappointing” results when people’s bills were purchased and forgiven, with little impact on people’s credit scores and willingness to go to the doctor.

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Secret home insurance commissions raking in millions for landlords in England and Wales

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Insurers have made huge hidden payments for buildings cover over many years, experts say

Landlords of developments in England and Wales where residents face hefty service charges face calls to disclose millions of pounds in “secret commissions” raked in over the years for arranging buildings insurance.

Experts say these hidden commissions, paid to landlords including City investment funds that hold freeholds and managing agents, have been worth tens of millions of pounds a year. The arrangements were made without residents being told and resulted in higher service charges.

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New federal US rules to curb use of prior approval by private health insurances

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Providers working in federal programs will be required to expedite patients’ prior authorizations for medications and/or surgery

A new set of rules from the Biden administration seeks to rein in private health insurance companies’ use of prior authorization – a byzantine practice that requires people to seek insurance company permission before obtaining medication or having a procedure.

The cost-containment strategy often delays care and forces patients, or their doctors, to navigate opaque and labyrinthine appeals.

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UK students launch Barclays ‘career boycott’ over bank’s climate policies

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Campaign at leading universities such as Oxbridge and UCL warns lender it will miss out on top talent if it finances fossil fuels

Hundreds of students from leading UK universities have launched a “career boycott” of Barclays over its climate policies, warning that the bank will miss out on top talent unless it stops financing fossil fuel companies.

More than 220 students from Barclays’ top recruitment universities, including Oxford, Cambridge, and University College London have sent a letter to the high street lender, saying they will not work for Barclays and raising the alarm over its funding for oil and gas firms including Shell, TotalEnergies, Exxon and BP.

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Ikea warns Red Sea attacks could disrupt supplies and deliveries

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Firm says it is weighing up options to secure product availability amid Yemeni rebel attacks on shipping

Ikea has warned that the disruption to global trade caused by Yemeni rebel attacks in the Red Sea could delay its deliveries and affect availability of some products.

The world’s largest furniture company said it was “evaluating other supply options to secure the availability of our products” after many big shipping companies stopped sending vessels through the Suez canal in response to the attacks by Houthi militants’ protests against the Israel-Gaza war.

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Direct Line to pay £30m to overcharged car and home insurance customers

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Company breached rules that state existing policyholders should not be charged more than new ones

Direct Line will pay about £30m to customers who were charged more than they should have been to renew car and home insurance policies.

The UK’s second biggest car insurer said it discovered the overcharging problem after the incorrect implementation of the new pricing practice regulation that came into force in January last year. Under the rules, existing customers should not be charged more than if they were a new customer.

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Fears many Australians will abandon home insurance as premiums jump 50% in high-risk areas

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Median premiums across all areas rose 28% in the year to March and actuaries warn climate disasters are driving them to unaffordable heights

Home insurance premiums have climbed by 50% in high-risk parts of Australia as global heating increases the frequency and cost of climate disasters, a new report has found.

The Actuaries Institute’s research on home insurance affordability and funding for flood costs, released on Monday, found median home insurance premiums rose by 28% in the year to March, sitting at an average of $1,894 across all states.

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Florida rocked by home insurance crisis: ‘I may have to sell up and move’

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Soaring hurricane-cover premiums are bad news for the state’s homeowners – and Ron DeSantis is accused of dragging his feet

Households in Florida, the third most populous state in the US, have been grappling for some time with a property insurance crisis that is making home ownership unaffordable for many. After at least six insurers went insolvent in Florida last year, Farmers on Tuesday became the latest to pull out of the Florida market, saying in a statement that the decision was based on risk exposure in the hurricane-prone state.

Climate change is threatening the very existence of some parts of Florida. And the costs are already being felt by Floridians. At the end of 2022, average annual property insurance premiums had already risen to more than $4,200 in Florida – three times the national average.

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Direct Line ordered to review five years of car claims after underpayments

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Insurer told to reassess vehicle write-offs to identify any unfair settlements

Britain’s second-biggest car insurer, Direct Line, has been ordered to go back through five years of claims after admitting it had underpaid some customers who had their cars and vans written off.

After an investigation into the car insurance market that began in December 2022, the Financial Conduct Authority (FCA), this week ordered Direct Line to conduct a review of claims where vehicles had been written off “to identify any policyholders who received unfair settlements and provide them with appropriate redress”.

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More pain for online retailer THG as top insurer reduces cover

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Cut-back of cover for suppliers is latest in a series of headaches for founder of the troubled business

The troubled online beauty retailer THG faces more pain after a leading credit insurer reduced cover to its suppliers.

The Guardian can reveal that Allianz Trade, one of the UK’s largest credit insurers, cut back cover for suppliers to the beauty-to-nutrition retailer, formerly known as the Hut Group, in recent weeks.

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The Australian suburbs where more than half of properties will be uninsurable by 2030

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‘We’re now seeing that the system is not able to cope with climate change,’ insurance analyst says

When Kim Sly moved to a lower-lying area of Forbes four years ago, she was asked to pay $12,000 a year for flood insurance.

The bill was a shock. Her new home was built 1.2 metres above the ground to protect it from floods, a factor that did not seem to influence the insurance company’s assessment.

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Insurance firms must lower premiums as government funds disaster prevention, minister says

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Murray Watt says Canberra is funding disaster mitigation infrastructure and ‘expects the insurance industry to fulfil its end of the bargain’

Insurance companies need to reduce premiums for customers in disaster-prone regions now the federal government is investing heavily in infrastructure to minimise loss during extreme weather, the emergency management minister, Murray Watt, says.

Ahead of confirming funding on Friday for 34 new mitigation projects to reduce the impact of coastal erosion accelerated by the climate crisis, Watt used an insurance industry conference to put the sector on notice.

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California bans insurers from dropping customers in wake of largest wildfire

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State enacts temporary insurance protections for a quarter-million homeowners in areas affected by recent blazes

California temporarily banned insurance companies on Thursday from dropping customers in areas affected by recent wildfires, a day after evacuation orders were lifted for residents near a two-week-old blaze that’s become the largest in the state so far this year.

Several days of sporadic rain helped firefighters reach 60% containment on the Mosquito fire in the Sierra foothills about 110 miles (177km) north-east of San Francisco. At least 78 homes and other structures have been destroyed since flames broke out 6 September and charred forestland across Placer and El Dorado counties.

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US fossil fuel firm sues insurer for refusing to cover climate lawsuit

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Aloha Petroleum’s case against AIG could set precedent as to whether firms are protected against climate damage claims

A fossil fuel firm is suing its insurer for refusing to cover a climate lawsuit in a case that could affect the wider industry’s ability to defend itself from litigation.

Aloha Petroleum, a subsidiary of the US-based Sunoco, filed a claim against AIG’s National Union Fire Insurance Company of Pittsburgh earlier this month, arguing it had failed to protect Aloha from the mounting costs of defending climate-related claims by local governments in Hawaii.

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Rise in insurance fraud fuelled by cost of living crisis, says UK insurer

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Zurich UK says fraudulent property claims from 1 January to 31 May 25% higher than in same period in 2021

A growing number of financially squeezed households are “turning to crime” by submitting bogus insurance claims, with data revealing a sharp rise in cases over the past year.

Zurich UK, one of Britain’s biggest insurers, said the cost of living crisis was fuelling the increase in insurance fraud, where people exaggerate or make up claims for items such as jewellery and electrical goods.

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Insurers Geico ordered to pay woman who caught STD having sex in car $5.2m

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Missouri appellate court rules Geico must cover ‘injuries and losses’ from disease after 2014 incident in Hyundai Genesis

The insurance giant Geico must give more than $5m to a woman who had sex with a motorist in his car and contracted a sexually transmitted disease, a Missouri appellate court ruled.

The ruling represents a preliminary legal victory for the plaintiff over the company best known for commercials starring an anthropomorphized gecko which speaks with a British accent.

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