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COULD YOUR PET BE INVALIDATING YOUR CAR INSURANCE?

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  • Not securing your pets ahead of a long drive could void your policy
  • 10 things you need to be aware of before you embark on a road trip

Car insurance is a legal requirement for motorists, and your insurer needs to have accurate information about you and your vehicle in order for it to be valid. Providing false information or failing to update it can mean that your insurer refuses to pay out for claims, or even cancels your policy.

With international travel restrictions still in place, many Brits have been enjoying summer staycations, but before packing up the car for a long drive, it’s important to check that you’re not accidentally invalidating your insurance policy. That’s why CarParts4Less.co.uk has shared 10 easy-to-make mistakes that might be invalidating your car insurance.

 

  1. Driving with pets

Our pets have become more of a lifeline than ever this year, and what better way to reward them than a dog friendly getaway. But if you’re planning on taking your pet on holiday with you, it’s important to remember that you are legally required to make sure they are secured. Unsecured pets can make a car more at risk of accidents, as they may distract the driver or even physically get in the way of driving. If you crash with an unsecured pet in the car, it’s likely that your insurance company will refuse to pay for your claim.

 

  1. Not informing your insurer about any car modifications

Before preparing for a staycation, it’s common to install roof or bike racks so everything that’s needed for the holiday can be packed. However, some drivers may be unaware that these additions can be counted as modifications by some insurers and this could require a change in your policy. Before installing, contact your insurer to let them know of your plans.

Car modifications can affect your insurance premium for two reasons; if they increase the likelihood of an accident, or if they increase the likelihood of theft. For brand new cars, optional add ons, including fitting a SatNav, can impact insurance so it’s important to ensure these options are noted when applying for a policy.

 

  1. Lying about your main address

Insurance premiums vary depending on the postcode, as some areas have higher rates of thefts and break ins. It can be tempting to put down your home address as somewhere different – your house when you’ve been staying at your partner’s or parents for example. However, doing so can mean your insurer can refuse to pay out, for example, if your car is broken into in the location it actually resides.

 

  1. Using more miles than you thought

If you’re planning on driving for a domestic holiday this year, it’s a good idea to consider whether the trip will fit into your insurance plan. Many policies use your annual mileage as one of the factors to calculate your insurance premium; the higher the mileage, the higher the cost. Accuracy is important when providing this figure, so even though many drivers won’t have driven much over lockdown, if a long trip will take you over your estimate it’s best to contact your insurer in advance to check that you’re covered for it.

 

  1. Ignoring your morning commute

There are three types of car usage that insurance covers; social only, social and commuting, and business. Social only insurance covers driving for social or leisure use,  going to the supermarket, etc. The commute to and from work, or even to and from the train station, are not covered by this policy, so upgrading to social and commuting is necessary, even if you only commute a few times a month. Insurance companies may dispute or refuse claims made during a commute if the policy is social use only, even if it is claimed to be only a one off.

If you use your car for work purposes outside of commuting, for example using it to get to meetings, or carrying equipment, you will need to get business cover.

 

  1. Letting other people drive your car

Long journeys can be tough for the driver, and it may be tempting to swap drivers during the journey. If you are considering doing this on the way to your holiday destination, it’s vital that they are added as a named driver onto your policy.

While it’s possible for your friends or family to have insurance policies that allow them to drive other people’s cars, it is unlikely these policies cover damage to the vehicle in the event they are in an accident, and your policy may only cover damage caused when a named driver is behind the wheel. So while your friend can legally drive the car, you may not be able to claim for accidents.

 

  1. Not informing your insurance company of minor accidents

In the case of small bumps or minor accidents where only cosmetic damage occurs, it’s common for motorists to have their car fixed without making a claim. However, even if you intend not to claim, it is important to inform your insurer of any damage received, as not doing so is a breach of policy. This helps in the event that the other driver changes their mind and decides to claim, and also ensures damage is accounted for if you do need to claim after future incidents – damage which is inconsistent with a claim may mean that you are denied.

 

  1. ‘Fronting’

Insurance for young drivers often costs more than other groups, and one way some motorists try to get round these higher premiums is by having a low risk driver, such as a parent or partner, named as the main policy holder, and adding the real motorist as a named driver. If you get caught ‘fronting’, your policy will immediately be cancelled, and any claims denied. These cases are often taken to court and classed as insurance fraud, with outcomes including fines of up to £5,000 and six points on your license.

 

  1. You’ve recently changed jobs

Your current occupation is one of the factors used to determine your risk profile, so it’s important to update your insurer if you have changed jobs or occupations. This is especially true at a time when many people have unfortunately lost their jobs and moved on to new employment. Failure to do so may mean any claims made after a job change can be denied by your insurer.

 

  1. Charging for lifts

Some policies specifically exclude cover for car sharing, whether you make a profit or not. For those whose policies do allow lift sharing, it may be void if you charge people for journeys – many state that you may only make enough to cover petrol and driving costs. Earning money from giving lifts can identify you as a ‘taxi hire service’, voiding manya policies.

It’s important to always read the terms and conditions of your car insurance policy, to ensure that you have not accidentally invalidated it. Keep your insurance provider up to date with any change of circumstances, regardless of whether you think it’s relevant, as some seemingly unrelated life changes can impact your premium.

 

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HIDDEN COSTS WHEN INVESTING… AND HOW NOT TO GET HIT

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By Annie Charalambous, Head of Communications at ETX Capital

 

According to recent figures, Brits plan to increase their investments by almost a fifth in the wake of the COVID-19 pandemic – with Gen-Z traders most keen to jump on the markets.

But are those looking to boost their profits paying over the odds without realising? A recent study claims UK investors often pay up to six times more in fees than advertised, costing some traders up to tens of thousands of pounds long-term.

ETX Capital is committed to shining a light on common hidden fees that can trip up new traders. Here’s how you can avoid feeling the pinch.

 

Taxing times

New traders are often unaware that profits made on their stocks and shares are subject to tax, in the same way they pay tax on salary earnings.

If your investment earnings are over £12,300 in a single year, you will have to pay Capital Gains Tax. This will either be 10 or 20 percent, depending on your annual income tax band.

However, married couples can ‘pool’ their tax-free allowance – meaning they can collectively earn up to £24,600 in trading profits each year without contributing Capital Gains Tax.

Some alternative savings vehicles also offer a larger tax-free allowance. For example, you can stash up to £20,000 each year in an ISA and earn interest on your cash.

For those looking to diversify their portfolio, many gold and silver coins are also exempt from Capital Gains Tax as they are technically legal British currency.

 

Commission costs

As with any commercial service, fund managers and platform providers that help traders set up and manage their investments will charge fees for their service.

However, the size of these costs can catch out unsuspecting investors. According to research, commission costs average 1.03 percent in the UK – around double the equivalent fees in the US.

While these costs are unavoidable for those who need support managing their investment funds, it is possible to reduce them. Research investment platforms and fund managers to ensure you find the most cost-effective commissions for your assets.

Alternatively, you may be able to avoid commission if you have the knowledge of the markets and are comfortable with the risk. If so, there are plenty of accessible platforms that will educate you on how to manage your stocks, forex, commodities and more. Although, keep in mind that you’ll likely have to pay fees to trade on these platforms.

 

Not that Stamp Duty

All stocks bought in the UK valued at £1,000 and over are subject to Stamp Duty Reserve Tax (SDRT). At 0.5 percent of the asset price, this can soon add up.

This tax is usually absorbed as part of a total fee charged by a fund manager. However, if you manage your own investments, you’ll need to submit details of your assets to the government in good time to skip late payment fines.

While SDRT marks a relatively small fee compared to the rewards on offer for successful investors, many may still wish to diversify their portfolios to avoid mounting tax bills. A common example is adding corporate bonds, which are exempt from SDRT.

 

Farewell feels

Many budding investors starting their trading journey simply aren’t thinking about what happens when you withdraw funds or transfer them to another platform. And for some, this means getting hit with unexpected ‘exit fees’.

These charges are typically written into the terms and conditions of an investment service and while many platforms and brokers have recently agreed to waive exit fees, there are still plenty leaving traders with a shock when the time comes to withdraw cash.

Exit fees are usually charged as a percentage fee of the withdrawn sum, which can represent a significant cost for longer-term investors.

It’s important to check for exit fees, which may also be referred to as ‘redemption fees’, before signing up for a platform or partnering with a fund manager. And those looking to escape these charges should look for providers that simply don’t apply them in the first place – or at least check the expiry date.

 

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INSURANCE TRENDS 2022

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INSURANCE TRENDS 2022
  1. The Insurance market will continue to grow in maturity based on the richness of solutions by InsurTech

In 2022, we’re going to see a true acceleration in the modernisation of the insurance industry. We’ve already started to see this change this year, but it will continue to grow at a rapid pace because of the amount of competition in the market. Competitors are now able to provide direct value propositions to clients that are much more convenient.

It will be key to modernise full technology stacks to get the value from IoT, data and the cloud. As a result, the rise of InsurTech is going to become the norm, with SaaS based solutions based on APIs put in place to deliver personalisation on a grand scale.

 

  1. The Insurance industry will become cloud native

Many companies are already using cloud as part of their growing infrastructure and this will be even more apparent in 2022.

Many of the newer technology solutions in the market are cloud native and as a result the insurance sector is starting to understand the true value of the cloud. Whether that’s based on accessing the wealth of third-party solutions available, improved efficiencies or cost savings , this trend will not slowdown and we’ll continue to see insurance companies look at solutions to help accelerate cloud migration.

 

  1. In 2022, the insurance industry will start using data managements at scale

Once insurance businesses move their IT infrastructure to the cloud, they will see huge gains from using data platforms.

While there are still many constraints in the sector around data management due to various regulations, the need to have proper solutions to cope with GDPR, cybersecurity and more has never been more vital.

We won’t see an explosion of new technologies, but instead insurance companies deploying current technology at scale and leveraging it to fulfil its true potential.

 

  1. The Insurance industry will continue to connect and work together with other industries

There is a huge role for insurance to play in several different industries and this will continue to increase in 2022.

For example, the automotive industry. Many modern cars have various IoT sensors which collect data on how a car travels. The telematics of the data is embedded in the car, which means data can then be sent back to relevant organisations, such as an insurance company, if an accident was to occur. This technology will only continue to get more sophisticated. AI also has a role to play and this will be driven by insurance as well.

There is also a huge opportunity in the healthcare industry and how the ecosystem of services and devices available can help individuals live a healthy life. As more products enter the market, such as Fit Bits and the Apple Watch, having the right solutions to process the data, store data and ensure its compliant will be key. It will continue to be an explosive market for insurance.

 

  1. The insurance sector will move towards being part of a wider ecosystem which will be API driven and open

With new platforms being created every day all over the world, we are already starting to see the development of micro insurance products that are built in a way that can be plugged into different marketplaces. This is driving product simplicity as well as ensuring focused customer engagement and services.

To take this to the next level, next year we will see the insurance sector take a larger role in this wider technology ecosystem. The focus for insurers will be on getting value from the technology. This requires a better use of APIs and creating partnerships with open architecture.

In Europe this has already started to happen and will become even more prominent in 2022.

 

  1. Throughout 2022, the cryptocurrency world will look completely different

We’re currently going through an evolution of tech ecosystems where insurance organisations are developing them and embedding into them more than ever. Already, we see Insurance players who are building payment mechanism leveraging crypto solutions.

As we move throughout 2022, we expect to see a growth in the alternative ways of making payments. We will start to see smaller players in InsurTech provide instant payments that perhaps are currently inexistant right now.

It will still take time for there to be a global crypto market, but blockchain will continue to provide new opportunities which will impact the insurance industry.

 

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