UK Temporary Car Insurance
Ever wished you could insure a car for less than
the usual 12 months, perhaps because you want to borrow one for a
short while, or perhaps lend one to a friend or relative? There is
now a short term motor insurance product
on the market
UK Car Insurance
Premiums and Claims
Vehicle insurance typically
covers property risk and risk of liability. Auto insurance coverage
typically entails protection for property, against liability and
medical expense coverage. Property risk includes theft or vehicle
damage. Liability risk includes legal claims resulting from an auto
accident. Medical expenses covered include injury, rehabilitation
and may cover wages lost and funeral costs.
Most countries, including the United Kingdom, do not require drivers
to purchase all the types of available coverage, only some coverage.
For vehicles used as loan collateral, the lender typically requires
specific insurance coverage.
Specific types of risk that may result in claims are known as
perils. Insurance policies will enumerate in detail which perils are
covered under the policy and which are not covered.
Insurers profit in two ways,
through underwriting and by investing. Underwriting is the process
that insurers use to select risks to insure and when determining the
premiums to charge for covering those risks. Risk evaluation
includes the probability that a loss will occur.
Rate setting takes into account the frequency and the severity of
insured perils. Additionally, the expected average payout that
results from these perils is factored into rate setting. Factors
that increase the likelihood of risk typically are factored into an
increase in the premium rate. The business model is to collect more
funds from the premium and investment income than will be paid out
in claims, and to offer an attractive premium to gain customers.
Profit is what remains after the premium and investment income
subtract loss and underwriting costs.
Insurance premiums are considered a monetary reserve above claim
payouts, or "float". Insurance companies typically invest float and
earn interest or other income until funds are paid out against
claims. The Association of British Insurers (which includes 400
insurance companies comprising 94% of UK insurance services) has
approximately 20% of its investments in the London Stock Exchange.
Claims and loss handling are
the actual insurance products insured parties purchase with
premiums. Claims may be filed by insured parties directly with the
insurer or through brokers or agents. The insurer may require that
the claim be filed on its own proprietary forms, or may accept
claims on a standard industry form.
Insurance company claims adjusters supported by a staff that
includes records managers and data entry clerks, are assigned to
incoming claims based on severity. Adjusters have variable
settlement authority based on their knowledge and experience. Each
claim is investigated by the adjuster, often in cooperation with the
insured. The adjuster will determine whether insurance will cover a
claim, to what monetary extent, and authorize allowable payment.
In handling claims, insurers strive for a balance in satisfying
customers, administrative costs, and overpayment of claims.
Policyholders can hire their own public adjuster to help negotiate
their best interests during settlement with their insurance company.
Fraudulent insurance practices are a significant business risk that
requires management. Insurance disputes between policyholders and
insurance providers over legitimacy of claims and handling can lead