Tabloid Edition

Insuring a van

We all know pretty much how to insure a car: you just pick up the phone and call the people with the nodding dog or the red phone (whichever way around those two go). Or log into a price comparison site and see where that takes you.

However, those mass market companies are pretty good when it comes to the mass market: but not when you come to anything more specialist. They'll almost certainly not have on offer what you actually want, at whatever price. So for things like van insurance you need to go to a specialist, like Autonet van insurance for example.

What's so special about van insurance you ask? Well, you see, you don't just want to insure the van. Yes, third party, fire, theft, comprehensive, all those sorts of things. But you'll also want goods in transit insurance (and, umm, no, that transit refers to movement, not a Transit Van) or at least you will if you're ever carrying goods for hire. Similarly, if it's your own work van you will want tool insurance: it's entirely possible (heck, with some trades, almost certain) that your tools will be worth more than the van.

If you've got a specialist vehicle, or one used for specialist purposes, then you're going to need a specialist insurer. Click through that link to find out more.

Van Insurance

A quick shout out to those who might be looking for Van Insurance.As we know, insuring a van is both essential as part of running a tradesman's business and also one of the major expenses of doing so. So being able to find someone who specialises in this type of insurance....and specialises in finding both the best and the cheapest insurance...is a welcome boon.

Which is why you'll want to click through that link and see what autonetinsurance have to offer. It's an interesting set up to begin with. They're more than just a comparison shopping site, for they run their own claims line and so on. But they actually get the insurance itself by checking the 40 leading brokers all the time. So you know you're getting the best deal as well. The end result is that you can get up to 70% off your Van Insurance which is a saving worth having anytime, not just in these straightened ones.

Given that they're specialising they also do all of the peripheral insurances that you would expect. Tool insurance, goods in transit insurance, all are available from the same cheery souls. And before you ask, yes they do also do car insurance, courier insurance and even home insurance. But it looks like they have specialist teams dealing with each area, so you get both the great prices and the very specific insurance you need.

Insurance quotes

One of the things that these intertubes bring us, the consumers, is the ability to do comparison shopping. Instead of having to walk around all the different offices, or even phone them, we can find out the prices and offers from different providers simply by looking online.

But it goes further than this as well. Consider, for example, looking for cheap car insurance. We don't in fact need to even go looking for if you click through that link you'll find yourself at a comparison site. They do all of the hard work for you. You tell them what you need, where you are, who you are, and they'll come back with which companies are offering you the best deals. It's a lovely little site, simple and easy to use.

Ain't these intertubes great?

An important point

There's a very important point about home insurance which I hadn't properly appreciated until I saw this site about Fort Worth Home Insurance. So I'm grateful to the site for pointing it out to me....as you will be too when I point it out to you.

We all seem to think that we only need home insurance if we actually own the home we live in. This isn't actually true. If we're in a condo or a rental we don't need no home insurance, we just need different insurance. Yes, the condo or rental insurance will cover fire or other damage to hte actual structure....but not damage to your possessions. Your furniture and belongings as an example.

So that's the tip for the day. You don't need no home insurance if you don't own your home, you just need different insurance.

Lloyds and North Korea

For some unknown reason my old school has traditionally provided a stream of people for the Lloyds insurance market. This does not reflect well upon the education they received:

The accident took place in April 2005 when, it is claimed, a helicopter owned by Air Koryo, the North Korean state airline, was dispatched from Pyongyang, the capital, to collect a woman who was in labour with triplets from a remote island. On the return flight it crashed into a warehouse on the outskirts of the city, causing a fire that destroyed a large amount of humanitarian relief goods.

The KNIC settled an insurance claim by the airline, which had compensated the owner of the warehouse, and claimed this back from its London reinsurers. According to the contract, disputes were to be settled under North Korean law and last month a court in Pyongyang ordered the reinsurers to pay the North Korean company the €44 million. They refuse to do so.

Disputes to be settled under North Korean law? Which idiot wrote that contract?

A good point: Lloyds were happy enough to cash the premium cheques for 9 years.

Flood Insurance

Two interesting snippets from John Tierney.

Starting in the 1960's, the federal government took over the business of insuring against floods. It offered subsidized insurance to people in flood-prone areas, encouraging seaside homes that never would have been built otherwise. Even at bargain rates, most people went without flood insurance - only about a third of the homes in New Orleans carried it.

People don't bother to protect themselves because they figure - correctly - that if disaster strikes they'll be reimbursed anyway by FEMA.
....

Here's the bargain I'd offer New Orleans: the feds will spend the billions for your new levees, but then you're on your own. You and others along the coast have to buy flood insurance the same way we all buy fire insurance - from private companies that have more at stake than do Washington bureaucrats.

Private flood insurance has come to seem quaint in America, but in Britain it's the norm. If Americans paid premiums for living in risky areas, they'd think twice about building oceanfront villas. Voters and insurance companies would put pressure on local politicians to take care of the levees, prepare for the worst - and stop waiting for that bumbling white knight from Washington.

I had thought that after the floods of 1992 the Feds had stopped subsidizing flood insurance in low lying areas. Obviously I was wrong.

Fake Insurance Contracts.

All the attention in the insurance world has been on AIG in New York, the Spitzer allegations and how and why was Warren Buffet involved. (Before that it was Marshall MacLennan of course, before that Lloyds...there does seem to be something about the industry). A little snippet out of Australia shows that Berkshire Hathaway, Buffet’s holding company and the owner of General Re, might have form in such things:

A Royal Commission found General Re Australia had loaned FAI money in a transaction that was portrayed as a reinsurance contract. The deal improved the appearance of FAI's accounts.

In 1998 another of Mr Buffett's reinsurance businesses, National Indemnity, sold an unusual insurance contract to Mr Adler's insurance company, FAI.

Under the deal FAI paid General Re $55m to protect itself against the risk of two large earthquakes hitting Australia within five years. At the end of the contract, FAI was to get all but $2m of the money back.

Australia has not suffered a devastating earthquake since the British settlement in 1788.

Now I tend to think that this does not involve Buffett directly, he is known as a hands-off manager. If you want a short-hand guide to his success, it was that he noted that insurance companies (especially re-insurance companies) have a huge float. Premiums are paid in many years before claims are paid out. If you can be a good investment manager (which he is, of course) then using your capital to buy an insurance company, and applying those skills to the float rather than just to the original capital, gives you great leverage. That’s pretty much what he’s done, while leaving the actual operations of the insurance side to the executives of the companies involved.

Bureaucratic Morons.

The Financial Services Authority brings in new rules about insurance policies:

New insurance regulations which come into force on Friday will lead to higher premiums, the chief executive of the UK's largest insurer warned yesterday.
Patrick Snowball, of Norwich Union, slammed the changes which will see 36,000 companies come under the regulation of the Financial Services Authority (FSA), accusing the watchdog of unnecessary red tape and creating a "gold plated level of regulation".

We can argue about whether such regulation is a good thing or not another day. This is the bit that got me:

He said the industry would pay around £215m to come under its umbrella, but "the overall cost, considering the vast size of the industry, is not that great".
The spokesman admitted the cost of complying will be about £2.80 a policy. He added: "It is not necessarily passed on to the consumer, but it is up to insurance companies how to deal with it."

Ïf it’s not the customers paying it then who the hell is? It’s too early in the day to go into vast amounts of theory, but there just isn’t anyone else to carry the cost. Think that perhaps the greedy capitalist shareholders will bear it? (Leave aside the mutual insurers, who don’t have them.) All that will do is lower the returns to capital, mean the industry will attract less in future, thus put prices up to customers.

That’s what angers me, a spokesman for the regulator, someone who should actually know these things, making such a dunderheaded statement. There is no one other than the customers who could ever pay such costs.

My advice to insurance companies is to simply add a 2.80 surcharge to each policy and call it the FSA tax. Sorry old boy, but this is what the paperwork costs us, write to the FSA if you don’t think it’s worth it.

National Insurance Idiocies.

Squander Two neatly skewers the idiocies in our system of National Insurance. The net effect is that if you decide that you don't wish to (or need to perhaps?) claim benefits when you are between jobs for a couple of weeks, then the system decides that you are not eligible for them in the future. Yet if you do suck off the taxpayer's teat then you are. Bizarre.

Just How Different is Warren Buffet ?

From About.com

Warren Edward Buffett was born on August 30, 1930 to his father Howard, a stockbroker-turned-Congressman.