Speakers' Corner

Why fully comp insurance won't cover you in court

Motoring lawyer Jeanette Miller is the senior partner of Geoffrey Miller Solicitors, one of the UK’s only firms specialising solely in defending drivers facing prosecution for motoring offences. Jeanette warns that ignorance is no defence when it comes to driving without insurance.

When I first passed my driving test, I remember thinking ‘fully comp’ meant that my insurance enabled me to drive any car with the owner’s consent. But, unbeknown to many motorists, while some policies do extend cover to any vehicle, many do not. 

In my job it’s amazing how many drivers I come across who face six to eight penalty points and a whopping fine (the maximum is £5,000) for driving without insurance when they genuinely believed their fully comprehensive insurance policy covered them to drive, say, their girlfriend’s car.

Unfortunately, the phrase “ignorance is no defence” is definitely applicable here and a driver who unwittingly makes this mistake could end up paying a very heavy price.

The same applies to people who allow direct debit payments for insurance policy premiums to lapse. It’s easily done and can happen to the best of us but if you try telling that to the magistrates it won’t make a lot of difference to the penalty they impose.

Insurance loopholes?

Insurance offences are probably among the most difficult for us to defend because cases usually boil down to a simple factual question: was the driver insured or not?

Incorrectly assuming you were insured doesn’t wash with the courts. Relying on someone else’s assurance that you are insured is also no defence. That is, unless you drive a company-owned vehicle and your employer informed you that you were insured to drive it.

If you relied on a parent’s assurance that you were insured on their car, this can also amount to a ‘special reason’ why the court can choose to impose no penalty.

However, if that kind of argument is raised, the person who gave the assurance that you were insured could find that they are prosecuted for 'causing or permitting' you to drive without insurance (also six to eight points and a fine).

A fairer solution

So why is the penalty so severe? According to market research firm Consumer Intelligence, in 2010 uninsured drivers cost the insurance industry £2 billion.

And in June this year even tougher laws were introduced to catch those evading insurance, accidentally or not. The new rules mean that even if a car is off-road, if it doesn't have insurance the registered keeper could receive a fixed penalty of £100.

On top of this they could have their vehicle clamped, impounded or destroyed, and face a court prosecution with a possible maximum fine of £1,000.

Perhaps it would be fairer if those who found themselves in court solely because of forgetfulness or ignorance faced no more than a cash fine, while those who deliberately drove without insurance faced a possible points sanction as well.

If you have a question for Jeanette on any aspect of motoring law, from parking tickets to speeding fines, please email editor@confused.com and your question with an answer from Jeanette could appear in our next blog.

Tips for festival-goers to keep goods safe on-site

David Trickey, one of Confused.com's IT bods and a seasoned festival-goer, has the lowdown on a free service that will keep your goods safe at festivals this summer.

It’s festival season again and over the last weekend of June, 180,000 people will be heading to Worthy Farm for the 2011 Glastonbury Festival of Performing Arts. Click here to have a read of our festival survival guide.

For one long weekend a working farm will transform into a city of happy festival-goers, with everything that goes with that - entertainment on an epic scale, food, drink, accommodation, sanitation, transportation, energy and crime prevention.

I’ll be earning my ticket again this year by working as a volunteer at one of the site’s many Property Lock-ups.

This is a free service at Glastonbury and a number of other festivals. Dotted round the site (marked with a keyhole logo on the official Glatonbury Festival maps ) is a network of secure storage areas.

The lock-ups are available 24 hours a day and we will look after any of your belongings - from small items such as car keys, passports, and phones to the heavy bags of clothes, food, beer and camping equipment that you don’t want to leave unattended in your tent, risk losing in a flood of Glastomud, or would rather not have to lug round with you all day.

This service is offered for free, although the charities we represent welcome donations. Oh, and we're the guys who hand out the free soap and toilet rolls!

This is a scheme that has been running for many years at Glastonbury and the people who use our services love it.

Unfortunately every year, we talk to the local constabulary who tell us about the incidents of theft and loss reported at the site. Like us they wish that as well as festival-goers making sure they are insured, they would do their best to make sure their valuables are secure in the first place.

Most lost or stolen items will never be found and can result in having to make a claim on home insurance, thus pushing up premiums.

So if you want to make sure you have a great worry-free time at Glastonbury this year then make sure you use the lockups.

See you there.

Read also: Motor tips for your festival trip

Confused.com's guide to festival survival

Festival fanatics: check you're covered

Make sure you avoid this new PPI trap

Chris Torney, personal finance editor at the Daily Express, warns victims of loan insurance mis-selling to beware losing more cash to a new rip-off.

Are you one of the four million people in line for a share of a multi-billion pound compensation fund after being mis-sold loan insurance?

Earlier this month, Britain’s biggest banks admitted defeat in their bid to block wholesale refunds of premiums after being found guilty of a series of rip-off sales practices designed to part loan and credit card borrowers from even more of their cash.

How the scandal happened

Over the past decade, hardly a single loan has been agreed without bank workers trying to add a payment protection insurance (PPI) to the package.

PPI was supposed to help borrowers meet their repayments if they lost their jobs or became too ill to work. But in reality it was expensive and in many cases almost impossible to make a successful claim on due to sneaky small print clauses.

Sales staff were found to have hidden the fact that PPI was included with the loans, or to have misleadingly indicated to customers that the cover was compulsory and that their credit application would be turned down without it.

Now the whole sorry saga has been exposed, lenders are expected to face a bill of more than £5 billion to settle huge numbers of claims: that works out at an average of more than £1,000 per customer.

Avoid another trap

So if you are in line to get your money back, let me ask you a question: how much would you like to pay to make your claim for compensation?

Here are the options:

a) £300

b) £1.23

It’s not a tough decision, is it? Yet this is the choice presented to thousands of consumers by the claims management companies that are aggressively marketing their dubious services at those who have lost out in the PPI scandal.

If you decide to sign up with one of these no-win, no-fee companies – the same firms that are causing car insurance premiums to rocket with their ambulance-chasing antics – you can expect them to keep as much as 30 per cent of any refund.

On an average £1,000 claim, that would work out as £300: nice work if you can get it.

The simple DIY approach

But why anyone who is capable of writing a letter and sealing an envelope would want to pay through the nose like this to a claims manager is beyond me.

Making your own application for compensation is simple.

1) Download or copy a template letter from a website such as Which?.

2) Tailor the letter to your own circumstances, including the reasons why you think you were mis-sold PPI.

3) Print it out and send it to your lender – use the Post Office’s recorded delivery service so you know it’s been safely received. That will set you back £1.23, including your stamp.

The bank has eight weeks to get back to you with an offer of compensation or the reasons for rejecting your claim. If you don’t hear anything, or aren’t happy with the response you get, you can take your case to the Financial Ombudsman Service at no extra cost. 

Why pension changes mean you should start saving now

By Chris Torney

Daily Express personal finance editor and Confused.com writer, says why you should start saving for a pension now.

Big changes to pensions are afoot. The government has just announced its intention to proceed with plans to pay a universal state pension, possibly of £140 a week.

Almost simultaneously, Lord Hutton published his report into pensions in the public sector, recommending that the likes of policemen and teachers should not only retire later, but also contribute more of their salaries towards funding their pensions.

Clearly, public sector workers are unlikely to be happy with Hutton’s proposals – and ministers face a bitter struggle with the unions if they attempt to impose these reforms.

But the plans make sense to anyone who understands how rising life expectancy has added hugely to the cost of guaranteeing the income provided by final-salary pensions.

The move to a flat-rate state pension should be much more widely welcomed, however.

At the moment, the state pension system is a bewildering mish-mash of National Insurance contributions, extra payments (in the form of the State Second Pension), and means-testing.

And it’s the last of these – the means-testing that is required to qualify for pension credit – which is the most damaging.

As things stand, any pensioners whose total income – from state and private pensions, as well as from savings or other investments – falls below a certain threshold can apply for a weekly pension credit top-up.

But there are two issues with this: firstly, many people find the means-testing process very intrusive (although it could be argued that this is how it needs to be).

The second problem, on the other hand, is much more damaging.

Essentially, the pension credit system is sending a message that for those who are, say, 10 or 15 years from retirement but don’t have much in the way of pension savings, there is not much point in starting to put money aside.

That’s because any extra income that a small pension pot generated would simply reduce the individual’s entitlement to pension credit. So the money they saved up could end up making them no better off.

Pension credit acts as a disincentive to save for thousands of people who could potentially put together modest, but useful, retirement pots.

The scheme is well intentioned, and goes a long way to helping many older people get by. But replacing it with a universal payment that can cover reasonable living expenses overcome the drawbacks I’ve mentioned.

It’s not yet known exactly when the flat-rate pension will be introduced – 2015 is the consensus view at the moment – but it now seems certain to arrive at some point.

So if you’ve been putting off setting up a pension because you weren’t sure it would be worth it, the message is now clear: get saving.

The car insurance debate: The APIL view

A big debate in Westminster has kicked off about rising car insurance prices, and Confused.com was invited to air our views on how the steep insurance hikes can be stopped. There are plenty of opinions on the subject being thrown around, so we’ve brought you both sides of the argument, so you can make up your own mind.

By Muiris Lyons, president of the Association of Personal Injury Lawyers

There is potentially bad news looming for consumers involved in motor accidents after the publication of a report by Lord Justice Jackson on the cost of civil litigation. It basically has ramifications for the consumer who relies on compensation payments to put his life back together after suffering an injury caused by another in a motor accident.

What the report means for motorists

When a person is injured because of someone else’s negligence, for instance in a motor crash, he relies on the law to ensure he can return to the position he was in before the injury happened, or as close to it as possible.

But Lord Justice Jackson’s proposals focus on saving money for the defendant who caused the injury, not the rights of the victim whose life has been shattered by it. Here’s why:

He has made a case for some legal fees to be paid by an injured person, despite him succeeding in his claim, out of his own compensation. The only reason for this “Jackson levy” on injured people is to save the defendant, or moreover his insurer, some money, which completely goes against the interests of justice.

Damages payments are carefully calculated to pay for an injured person’s needs. To take legal fees out of an injured person’s damages is morally wrong. What has happened to society to make people believe that saving money for a defendant is more important than giving an injured person justice?

Serious efforts are already being made to help reduce the legal costs of personal injury claims with a new process for dealing with road traffic accident claims. This process, which started in April, will account for up to 75% of all personal injury cases and is likely to lead to significant savings for insurers. Let’s see if those savings get passed on to consumers in the form of lower insurance premiums before making innocent victims start footing the bill for insurers too.

The government must recognise that the best way to reduce the cost of personal injury litigation is to prevent needless injuries happening in the first place.

This is just one side of the argument so read the ABI's views concerning compensation for motor accidents.

Read the report into rising car insurance costs and see Confused.com in action in the parliamentary debate (this opens in a new window, and you may have to install Microsoft Silverlight to watch the video).

We’re interested in your comments on the proposals and the subject of rising car insurance as a whole. Is there something Confused.com should do to help halt them? What would you like to see happen? Please comment below.

The car insurance debate: The ABI view

As no motorist needs reminding, the cost of car insurance is rising. The issue has become so contentious, that the government has got involved and a debate has taken place in parliament, one in which Confused.com took part. Read the car insurance debate then see what the ABI has to add to it below.

By the Association of British Insurers

One of the main reasons for the rising cost of car insurance is the spiralling legal costs in settling personal injury claims following road accidents. The ABI’s (Association of British Insurers) analysis of over 50,000 low value road accident personal injury claims shows that settling the average claim of £2,430 costs the insurer an extra £2,100 in legal fees, almost equal to the amount as the settlement itself.  And, for every £1 insurers pay in compensation, an extra 87 pence is now paid out in legal costs for claims valued at under £5,000.   

So why are the legal costs so high?

Some claims management companies have transformed today’s ‘claims culture’ by fuelling public belief that behind every accident there is a claim to be made.  Little does the consumer know that these companies often have very high legal fees, which are paid out by the insurers, who in turn have to add this to the cost of motor insurance premiums.  This of course ends up being paid for by the customer.

This is clearly excessive and unfair to the consumer who now has to pay out on average an extra £40 a year to their motor insurance premium to help cover the cost.

Action needs to be taken

Something needs to be done to reduce high legal costs.  We need a simpler, faster, more cost-effective compensation system that gives claimants a much better and fairer deal. Reducing excessive legal costs is essential to achieving this and is why ABI agrees with Lord Young’s recent report on tackling the health and safety culture and wants to see the recommendations of Lord Justice Jackson’s review of civil litigation costs implemented in full as soon as possible.

This is just one side of the argument so read the APIL's views concerning compensation for motor accidents.

Read the report into rising car insurance costs and see Confused.com in action in the parliamentary debate (this opens in a new window, and you may have to install Microsoft Silverlight to watch the video).

We’re interested in your comments on the proposals and the subject of rising car insurance as a whole. Is there something Confused.com should do to help halt them? What would you like to see happen? Please comment below.

Beware: The courtesy car insurance trap

By Vic Leyton

It sounds almost too good to be true doesn’t it? Within an hour of an accident that wasn’t your fault, an accident management company sweeps in, gets you a hire car, tells you the costs will be covered by the liable parties’ insurer, that you won’t have to pay an excess and that it won’t affect your insurance... just sign the form...

But stop! Hold that pen! The fact of the matter is that you may have to pay, as people are increasingly finding out.

Accident management companies capitalise on the inconsistency of insurers when it comes to providing a hire car. They play on the fact that the liable insurance provider is technically responsible for any costs, and they then provide vehicles for the innocent party at a massively inflated cost. It is indeed big business.

Without taking into account the impact that these overpriced hire bills are having on everybody’s car insurance policies, it’s important to make sure that you are entitled to that vehicle before committing ink to paper and getting behind that wheel.

It’s crucial to make the distinction between need and want here, as entitlement, unfortunately, does not extend to ‘well, they’ve inconvenienced me, I need this car.’

For example, how will the loss of a roadworthy vehicle impact your life? Remember, you will be signing a legal document saying you cannot function without this type of car. How hiring a car after an accident could cost you more than you ever imagined.

If you don’t think you could get stung by this, just take a look at the legal battle that footballer, Darren Bent faced after he got a bill for £64,000 after the other parties’ insurance provider pointed out that an international footballer with a garage full of prestige vehicles could not really have felt the same sense of loss as a pensioner who relies on her Corsa to get to the shop and back.

Something else you need to consider is how the liable insurance company has dealt with the claim. If it has offered you a suitable replacement vehicle fit for your needs and you still elect to go with an accident management company and accept a car with these inflated costs, once again you could be liable for the costs. Whilst you are not at fault for the accident, it is still an obligation to do your best to avoid any unnecessary costs.

If there is any chance you will be at all responsible for the accident, it could be very unwise to go ahead with the car hire as, under the terms and conditions of the contract you sign, you will more than likely be liable for any of the costs the other insurer doesn’t pay for.

Doubtlessly, in the event of an accident where you are not at fault, then you are entitled to feel the minimum level of inconvenience possible. But signing a deal with one of these opportunist companies though, is not always the best way forward.

Most car insurance providers these days are more than happy to accommodate reasonable requests and provide a like-for-like vehicle in the event it is clearly not your fault. You may also already have courtesy car provision in your own car insurance policy, so make sure you aware of what exactly you are entitled to and for how long.

If you’ve experienced similar problems let other readers know here.

Vic Leyton is a PR executive at Confused.com

Scared by dogs? The government wants to know if you feel in danger

Confused.com enlists the views of Ryan O'Meara, publisher of K9 Magazine, to tell us what he thinks about the contentious issues surrounding the Dangerous Dogs Act.

The subject of dangerous dogs is in the news again following a recent fatality, the sixth in five years, plus government consultation on amending the Dangerous Dogs Act. The consultation is asking people whether current legislation adequately protects the public or encourages responsible dog ownership.

The Problem with the Dangerous Dogs Act

Over the past five years, there have been six fatalities caused by dangerous dogs in the UK. This is despite legislation introduced in 1991 – the Dangerous Dogs Act – which sought to protect the public and reduce the number of serious dog attacks.

When the act was introduced, its main emphasis was to prohibit the existence in Britain of four types of dogs: The Pit Bull, Japanese Tosa, Dogo Argentino and the Fila Brasileiro – but prior to 1991, no human had ever been killed in the UK by any of these breeds. In fact, with the exception of the Pit Bull type, Britain could count on one hand the number of those breeds that had ever been in the country.

However, despite the ban on Pit Bulls, the police and government believe that there are now more Pit Bull-type dogs in the UK that are being used as weapons or status symbols, than at any point in history. What this suggests is that the attempt to ban an entire dog breed has failed.

Why has the Act Failed?

Many people assume that a dog breed is a fixed, easily determined assessment. You see a Labrador, you recognise it as a Labrador. You see a German Shepherd, you recognise it as a German Shepherd. But what happens with those dogs who aren't quite one thing or the other? Dogs that look a little bit Labradorish or dogs that appear to have a bit of Doberman in them? 

We commonly call them crossbreeds, but in the UK the Pit Bull has always been a cross-breed. There is no breed standard and there never has been. So to attempt to eradicate a breed that isn't and never was a breed has been an expensive exercise that was always doomed to fail.

Illegal Breeds

To further compound the problem – two legal dog breeds can produce an illegal one. For example, we can mate a Boxer and a Mastiff and the result could produce a litter of puppies, four of which look like Boxers, one that looks like a Mastiff and one that happens to grow up and fits the physical description of 'Pit Bull type'.

Therefore, the attempt to eradicated entire types of dogs based entirely on what they happen to look like has proven to be an impossible task.

Breed-Specific Legislation

The main animal welfare organisations and the Kennel Club have united in their opposition to this concept, known as ‘breed-specific legislation’, and as Britain suffers its sixth fatal dog attack in five years, I believe it’s time to revisit the facts.

Whilst the breeds involved in the attacks vary, the pattern and circumstance surrounding the deaths does not. In all cases, the owner was not present and the victim was killed by a family dog in a family home.

Family Dogs to Blame

At a time when the government is seeking out the opinion of the general public on what to do about serious or fatal dog attacks, it's imperative they look at the facts rather than the hype. It's actually not so-called 'status dog' owners whose dogs are killing people, but family dogs.

Education and preventative legislation would appear to stand a greater chance of achieving success in the battle against dog attacks as, it would certainly appear, a fatal dog attack is far more likely to happen in the family home from a family dog when the dog owner is not present, as opposed to a dog being used as a weapon on the street.

In short, as everyone would surely hope for an end to lives being lost to dogs, we must address the facts surrounding these fatal attacks, rather than focus on hype, headlines and unworkable controls on a specific breed.

Got a view on the subject? Let us know by commenting below.

Making Saving Simpler

In order to explore ways to strengthen the power of the public, the Carnegie UK Trust set up a Commission of Inquiry into the future of Civil Society. One of the major policies to spring out of it was a simple labelling measure, aimed at making financial products easier to understand. Confused.com enlisted Geoff Mulgan, chair of the commission, to tell us more...   

 

For years, we’ve become accustomed to seeing labels on food products clearly explaining their content and how they have been produced. Similarly, when we buy clothes, labelling means you know exactly where the product was made and what it is made of. But why is it that when you go and choose which mortgage to take or which pension to invest your money, or even who to bank with, there is no such thing as financial labelling? And why are there so many products on the market that a lot of customers don’t really understand (something that was driven home during the financial crisis)?  

Making Good Society, a report which we recently published, calls for a ‘comprehensibility threshold’ which would ensure a minimum standard of user-friendly language on financial products. Under our proposals, if it turned out that a majority of the customers of a financial product didn’t understand a fundamental aspect of it, the Financial Services Authority (FSA )would require it to be removed from the market. The aim would be to put much greater pressure on providers to ensure that customers understood what risks and benefits they were signing up to.

Too often at the moment, business models essentially assume that customers won’t really understand the nature of the product they’re buying. This plan wouldn’t stop the marketing of complex products completely – but would limit it to customers able to understand their complexities. If a majority of their actual customers didn’t understand them, they would be removed from the market.  

A second recommendation is for better labelling. Whether it’s ISAs, bonds or savings, the public should have a right to know exactly where and how their money is being invested. That’s why a recent commission of inquiry, funded by the Carnegie UK Trust, has recommended the introduction of compulsory ‘Fair Trade Style’ labelling on financial products before they can be sold.  

Both initiatives would enable customers to make fully informed choices before purchasing financial products, with all product information presented in a simple, jargon-free way. Greater responsibility would be placed on financial institutions to inform all customers of how the company invests its money, so people know whether not their money is buying shares in companies with good social and environmental track records. In an age of consumer power, this move would give the ordinary investor, faced with a wide array of choices, more control over the way their money is used.  

Comprehensibility tests, likewise, would see the consumer being given greater power. Although there is currently a legal obligation on financial institutions to fully inform customers, most people find ‘financial language’ difficult to understand. This, in turn, has wider implications, affecting the way in which the general public engage with financial institutions in terms of governance and accountability. It is only when the public can hold these big institutions to account that our failing financial system can properly reform itself and be truly ethical.  

Ordinary investors do have the power to influence investment policies. Fair Pensions’ recent campaign, Counting the Costs, saw citizens from across civil society hold BP and Shell to account with respect to the sustainability of their operations in Canada.  This is just one example of ordinary people having the power to influence the policies of major financial institutions. And with this week’s Budget announcement compelling UK banks to provide a basic bank account to every citizen, it is more crucial than ever that these institutions are transparent, accountable and compelled to communicate their products clearly to their customers.  

Geoff Mulgan is chair of the Inquiry into the Future of Civil Society  

www.futuresforcivilsociety.org

Savers Must Unite To Save themselves

  
 

 

Savers are becoming increasingly disconcerted with the poor savings rates being paid by banks and building societies across the UK, and on the back of this, an action group has launched in the hope the government will take action. Confused.com invites new action group Save our Savers and one of its founders to tell us more about its plight for savers.

 

 

Is it time for savers to take a stand?

 

It is time for savers to fight back. There are over 24 million savers in the UK; our savings provide the working capital for the economy, yet time and again successive governments have removed the incentives to save, promoting a culture of borrowing and consumerism over that of saving and responsible spending. The prudent are now being punished for the excesses of the few. Save our Savers is the first organisation to bring savers together into a union to defend themselves.

 

Britain’s debt-laden economy is teetering on the brink of further collapse and only the restoration of a healthy savings culture can hope to rebalance this deficit. Saving must become a cornerstone of government policy. The government must set a target for the household savings ratio, of at least 8 per cent over the long term and encourage, incentivise and reward savers to achieve this. Not doing so will simply result in a poorer life for us all in the UK.

 

Possible moves to help savers

 

Among the steps Save Our Savers will be proposing are the introduction of a tax free allowance to cover all savings interest and re-introducing the tax rebate that was removed from pension funds in 1997. Maybe the politicians can come up with further incentives, in which case lets hear what these are.

 

In the past, many of the issues we are raising have gained media attention but no response. Many very clever and well resourced think tanks have come up with thoroughly researched policy ideas, only for them never to surface again.

 

These lone voices failed through lack of any public support. The majority of the population may be savers, but they are a very silent majority. Our aim is to give this silent majority a voice; we want to unite savers into an independent action group that will fight for recognition on their behalf. Like a trade union we will speak up for our members and take steps to demand action and resolution from the government. We will co-operate and cajole, but if we are not listened to we will take action.

 

What you can do to lend your support

Don’t just think there is nothing that can be done. At our launch in January, Frank Field MP supported us and challenged us to organise a million signatures on a petition demanding a better way and a fair deal for savers.

 

So if you are unhappy with the unfair deal savers in this country are getting, lend your support to Save our Savers by becoming a member for free and sign our petition at www.saveoursavers.co.uk.

 

Got something to say about the action group? Or savings rates in particular? Then add your comments below. We at confused.com want to hear your thoughts.

 

Jason Riddle is one of the founders of Save our Savers