Insurance is available for almost everything these days and the world wide web has created a highly transparent and competitive market place for insurer services. You are required by law to have certain insurance such as car insurance or medical insurance in certain jurisdictions. Other insurance although optional in law is seen by most as [...]
Insurance is available for almost everything these days and the world wide web has created a highly transparent and competitive market place for insurer services. You are required by law to have certain insurance such as car insurance or medical insurance in certain jurisdictions. Other insurance although optional in law is seen by most as a ‘must have’ such as home insurance or insurance for corporate property and business assets. Then there is a third class of insurance aimed mainly at consumers that is highly specialised such as pet insurance, wedding insurance or certain types of extreme sports insurance. Either in the high street or on the internet, companies offer varying rates and excesses depending on various factors. A secondary market also exists for customers to buy the services of insurance brokers who shop around for products at the behest of their consumer or corporate clients. Another service offered primarily through agents is underwriting.
This is where the insurance venture’s risks are calculated and the underwriter determines the premium and cost of the insurance or whether the agreement is viable at all. An example from car insurance would be to take a detailed look at a driver’s accident record. Another example might be medical insurance where the patient’s medical records are examined. The internet certainly helps the insurance marke maintain its competitiveness and transparency but some customers are even now finding themselves uninsured in times of emergency. Extreme winter sports insurance demonstrates this well. The industry believes that over 50% of travelers to ski resorts are uninsured and although the other half do, only a quarter of them are actually covered for skiing and snowboarding which are categorised by almost all insurance firms as ‘extreme sports’ and excluded from their plans. Most travelers to Europe also think that their E111 Is good enough for treatment but this is not true at most resorts. Another interesting example of The adaptation of the insurance sector is the relentless price war between opposing travel insurance firms that has been largely facilitated by the mass uptake and use of price comparison sites. In this country, we are legally obliged to have car insurance so It simply must be bought by every individual with a car. This causes pricing to be the chief competitive factor.
A recent example of a failure in the sector was when payment protection insurance policies (PPI’s) were discovered by the FSA to be completely worthless or having been fraudulently sold to customers. This has caused a storm of litigation from customers and firms actually being set up for the single purpose of acting as legal assistants so that customers can claim back any PPI that might have been missold to them. Compare travel insurance on the web for the greatest bargain. A further dubious insurance product is internet security insurance that claims to reimburse the customer for losses on account of cyber fraud or identity theft. However many people are unaware that the bank is in almost all instances liable for such acts.
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