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Controversial drilling procedure may affect home insurance premiums

Thursday, November 3rd, 2011

$fracking$ Homeowners in the North West of England may find themselves paying higher home insurance premiums in the future as scientists working for a drilling company admitted that that their gas exploration activities probably caused the two minor earthquakes that hit the region earlier this year.

Geological risks associated with fracking

Workers for the Cuadrilla Resources Company have stopped their controversial method of extracting resources from the ground, known as fracking, until more tests have been carried out. The process which involves the injection of water and chemicals into layers of rock under high pressure is done to produce quantities of Shale Gas. The procedure is known to cause minor problems in the geological structure of the immediate area but companies believe the profits generated from the mining, warrants the small risk to the local area. Already France has banned the technique and protesters who say fracking is dangerous and contaminates drinking water as well as destabilising the ground staged protests in London at a mining conference and on Merseyside earlier this week.

Mining set off dozens of tremors

Earlier this year two small earthquakes hit the Fylde region, one measuring 2.3 on the Richter scale and another smaller one measuring 1.5. Although experts assert that quakes of this magnitude do not cause structural damage,several residents in the Fylde area did claim on their home contents insurance policies for damage to glassware, pottery etc. Many householders said they felt the shocks in their homes. The scientists also revealed that the mining triggered off up to 50 very small tremors as well as the two quakes. The scientists said that unusual geological conditions at the well base probably caused the problem and other wells in the area may not trigger off the same effect.

Costs homeowners can do without

Home insurance providers are certain to factor in the possibility of earthquakes in the region if the drilling continues and although the increases in premiums may be small the fact is that they could have an effect on incomes, at a time when financial pressure is coming to bear on most homeowners.

Tags: Cuadrilla Resources Company, drilling, fracking, home contents insurance, Home Insurance, Homeowners
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Is it a post code lottery when it comes to insurance?

Thursday, October 6th, 2011

While most homeowners realise the value of a good home insurance policy, it is doubtful that many know how much the premiums of a policy depend on the geographical situation their home is in.

Riot torn London and Channel Island haven come out best

According to a recent report by a well known home insurance comparison site the difference in an identical policy from one area of the UK to another is staggering. In many cases the differences in prices are also very hard to understand. For example the report, which uses post codes to glean the information, compares 2011 prices with those in 2010. The three post codes that have benefited most by seeing a decrease in policy premiums are; JE, the post code for the Channel Island of Jersey, London SE, a post code in South East London, and London EC, a post code in East London. Not much difference there!

From top to bottom in a few miles

One can understand that perhaps a small island in the middle of the English Channel will have a small crime rate, an older, wealthy population and a comparatively temperate climate, although it did have its fair share of snow last winter. So it’s not a surprise to see it at the top of the list. That is of course until you look at the post code at the other end of the list, the one that has seen the biggest increase in premiums over the last 12 months. Believe it or not the post code at the bottom of the list is GY, the post code for Jersey’s nearest island neighbour Guernsey!

Massive difference

While residents of Jersey have seen an average decrease in the cost of their household insurance by 12%, those across the water in Guernsey have seen theirs rise by an incredible 32%. Talk about a post code lottery! To further confuse the issue two other island communities, Kirkwall in Orkney and Lerwick further north in Shetland fare badly as well. It may well be that Kirkwall and Lerwick do tend to suffer from more inclement weather but one cannot imagine either being a crime hotspot.

There seems little householders can do in areas where premiums are high, except for grin and bear it or of course move house. However, it does seem insurance providers could do more to justify their pricing.

Tags: Homeowners, household insurance, Postcode
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Low interest rates good news for some

Thursday, August 11th, 2011

City experts were split over the effects of the latest inflation figures released by the Bank of England (BoE) but at least in the short term homeowners can expect to see little change in their mortgage interest rates. How and where savers can find a safe haven for their money, however, becomes more complicated by the day.

Inflation and growth overestimated

The report suggested that the BoE’s prediction for growth in the economy and the inflation rate may both have been too high and they now forecast both to be less than they first thought. Following on from the announcement of the USA’s federal bank’s assumption that low interest rates will be around for at least the next two years the BoE seem to be suggesting the same thing in the UK.

Borrowers will benefit

This is good news for homeowners who have held mortgages for some years and have benefited from the low interest rates that currently are attached to their mortgage. It is also good news for those looking for a home insurance quote on a new home if they have the wherewithal to find the huge deposits that lenders are now looking for. It is not such good news for savers who seem to be running out of options for safe places to put their money.

Riots will make investors think again

The riots in London and other Provincial cities will have caused many homeowners to make household insurance claims; the same will apply to landlords and property investors. The letting and housing sector in London has been booming for the last 12 months and much of the investment in the housing market has come from savers who have been looking for a good return on their cash.

Banks have only offered miserly interest rates for over two years now and the uncertainty of the currency exchanges has ruled them out for all but the boldest of investors. Gold has been a safe haven in times of trouble down the ages but the current price of gold means that opportunity has now passed. That left property and the stock markets as the best two choices for the average investor. The astounding fall in share prices across the globe last week may have decided many global investors to turn their wallets towards the London property markets, the disturbances of the last four days will have ensured that idea is put on the back burner for many, and investors and savers across the world must be wondering just where is a safe place for their money.

Tags: Home Insurance Quote, Homeowners, Mortgage, property market
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Holiday period not the time to dispense with insurance

Thursday, July 28th, 2011

With the holiday season well and true upon us many people will be relaxing for the first time in many months and looking forward to a fortnight by the sea in some foreign clime. They won’t be thinking too much about affordable home insurance quotes, personal possessions insurance or even travel insurance, but they should.

Most people feeling the pinch

It is without doubt that many homeowners and holiday makers have had a troubled financial year. The austerity measures brought in by the incumbent Government have affected almost everyone. Even those lucky enough to have held on to their livelihoods have still encountered hugely inflated energy bills, unbelievably expensive fuel charges and motor and home insurance quotations that frankly shock!

Wrong Decision?

It is against this backdrop that many families have squirrelled money away to pay for their holidays, and there is no doubt that some will have decided to forego insurance protection to ensure the family gets a holiday. It is a decision that some will sympathise with but it could be oh so costly.

EHIC not a solution

UK residents travelling to European countries such as Spain, France and Germany may well believe they are covered by the European Health Insurance Card (EHIC) scheme, and to a certain extent they are. They will get cheap basic health care in any of the mainstream European countries; however, it is not travel insurance. It will not pay out if you miss your ferry, lose your luggage or break down in your car. It is handy but it is most certainly not travel insurance.

Personal possession a must

The same applies to personal possession insurance. For around £25 extra on a household insurance policy you can insure your valuables whilst you are away from home. Your laptop is another thing not covered by the EHIC, it may not even be covered by your travel insurance, but it will be covered by personal possession insurance, and so will be gold watches, mobile phones and anything else of value you take away with you.

Not worth the risk

A holiday is great tonic for hard working families; it is a time when they can relax and have fun together, unfortunately it is also a time when accidents happen. When we relax we are off our guard, this applies not only to our possessions but to our own personal safety it would be a shame to spoil a well earned break for the comparative cheapness of a good insurance policy.

Tags: Holidays, Homeowners, household insurance, Travel Insurance
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House price report raises a few eyebrows

Tuesday, July 26th, 2011

The news this week from Zoopla that house prices are once more on the rise will come as a shock to many homeowners who have had their homes on sale for many months and despair of attracting offers anywhere near the asking price.

Out of kilter

Thousands of households across the UK are getting cheap home insurance quotations on a property they thought they would have moved out of months ago, simply because they cannot sell their home at a price that will enable them to finance their planned move. The news from Zoopla seems highly surprising when comparing it to recent reports from institutes such as the Council for Mortgage Lenders (CML) who noted that home loans are at record low levels and the Royal Institute of Chartered Surveyors (RICS) who reported that sales and house prices have been stalled all year and forecast more of the same for the rest of the year.

Top end of the market driving price rise

According to the report house prices on average have risen over £200 a week throughout 2011 with houses at the luxury end of the market being the main driving force. Apparently families looking to purchase new household insurance on four and five bedroom homes are prepared to pay premium prices in most regions of the UK. The reasons behind the resurgence are put down to a number of factors with low interest rates, the weakness of the UK currency attracting overseas investors, plus the inevitable effects of supply and demand being seen as the major contributors.

Big difference between asking price and sale price

The report has been greeted enthusiastically by some in the industry but not all will be immediately seduced by the promise of a new dawn. It is difficult to pinpoint whether the report is based on sale prices or asking prices and as everyone in the industry knows there is a massive difference. The London housing market is without doubt buoyant at the moment but elsewhere there is a different story to tell. Vendors new to the market have read reports of falling house prices for months on end and a conversation with anyone who has had their home up for sale at any time over the last 12 months will have confirmed their worst fears. There are not many buyers around and those that do make a bid put in an offer well below the asking price.

Phoney market

It is not all impossible that we are seeing a market where buyers are bidding low, and to compensate vendors and estate agents are inflating valuations. So we get to a point whereby house valuations are going up by the day and bid prices are going down. It creates a phoney market and impedes the selling of property. Unfortunately it is possible that the UK market has now come to this point, the next few months will probably show us what is really happening.

Tags: cheap home insurance, Council for Mortgage Lenders, Homeowners, Royal Institute of Chartered Surveyors, Zoopla
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Stagnating Britain does not know which way to turn

Thursday, May 26th, 2011

The revised figures published by the Office of National Statistics (ONS) yesterday for the first quarter of 2011 revealed little change, they did though show that homeowners across the UK may well still be buying essentials such as fuel, energy and home insurance but they are not buying much of anything else and unfortunately the same applies to the business sector.

Consumer spending and business development both drop

The report shows that although the economy is not officially back in recession it very nearly is, the growth of just 0.05 in the first quarter of 2011 combined with the 0.05 drop in the last quarter of 2010 shows that that the economy has stood still for 6 months. This could not hide the fact that household spending in the UK dropped by 0.06 in that period and is at its lowest for 2 years.

Business investment over the same period fell by an amazing 7% but this was explained away by the fact that the last quarter of last year was particularly good because a number of high profile businessmen bought executive jets before the change in VAT. No doubt with their bank bonus!

Interest rates. Will they, won’t they?

The disappointing figures led to speculation that interest rates would now stay the same for the rest of the year. However, on the same day another think tank, the Organisation for Economic Cooperation and Development (OECD) said that, although chancellor George Osborne’s austerity budget was on the right lines he may have to dilute them otherwise he will need the Bank of England (BoE) to up interest rates sooner rather than later to stop inflation running away with the economy.

General public have no time for debate

The OECD predicted UK growth over the next two years would be somewhat below that of the predictions of the Office of Budget responsibility (OBR) and the economy would need a timely stimulus. All this of course will bypass the general public who at the moment are spending more time looking for bargains such as cheap home insurance and fuel at less than £1.40 a litre, rather than listening to politicians point scoring over the financial mess they are overseeing.

Tags: Bank of England, Consumer spending, Home Insurance, Homeowners, money, Office of National Statistics
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Disappointing inflation figures set the scene for interest hike

Thursday, May 19th, 2011

After last month’s pleasantly surprising drop in the UK Consumer Price Index (CPI) to 4%, homeowners were once more given cause for concern about a rise in interest rates when the figures for April showed an increase of 0.05% to 4.5%. The figure was just as surprising as the March ones really but altogether more unpleasant.

Worrying times

The prospect of a hike in interest rates has once more been raised and consumers already paying over the odds for fuel, home insurance products and energy will be more than a little concerned.

Economists rewriting their scripts

The drop in last month’s figures coupled with the gloomy recovery predictions from Mervyn King, the Governor of the Bank of England (BoE) had led pundits to believe that the record low Base Rate of interest would remain the same for the rest of this year. They are now revising their forecasts once again with economists appearing in front of TV screens seemingly every day, voicing their opinions.

Been wrong before

November is now reckoned to be the time when interest rates will start to go up but city forecasters have been wrong before and just for an example of how wrong they can be the long term forecast for interest rates in May 2011 by a leading economist in August 2009 was actually 3.5%. That is some way out, and remember in August 2009 we already had rates of 0.05%.

5% the tipping point

Of course if inflation is at 4.5% now, then the predicted increases in energy costs in the autumn may well take them over what many see as the pivotal figure of 5%. Inflation over 5% would really point to the BoE as having lost its grip on the economy and would probably result in an interest rate increase.

Getting house in order now may pay dividends

How many homeowners will try and organise their finances around an interest rate hike is anyone’s guess, but the time may be right for consumers to get a new home insurance quotation if their policy is due for renewal and the same could apply in regard to their energy and home loan providers. Making sure one can manage the essential bills over a period of a few years can take a great deal of stress from the financial management of any household.

Tags: Home Insurance, Homeowners, Interest rates, Saving Money, UK Consumer Price Index
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