The life assurance industry has a figure it occasionally bands around for what it calls the ‘Protection Gap’.

This gap is the difference between the level of life assurance cover that we actually have compared to the amount of cover that the insurance industry believes we actually need. The insurers say that the size of this gap currently stands at a whopping £2.5 trillion and is growing every year.

As a consequence, the experts say we are massively underinsured. But in what way?

Whilst as a nation we are generally very good at ensuring that the mortgage is covered by life assurance should the worst happen, it appears that we may neglect to consider such other costs as supporting children, general living expenses and, of course, credit card debts and other loans.

If you have a family and dependants, it is vital to consider the consequences of something serious happening to the main bread winner, In such a situation, the other partner could face severe financial difficulties.

Unlike many goods and services, the cost of life insurance has actually declined in recent years due to the enormous competition in the industry. So, if you do have life assurance, even though you are older now than when you first took it out, it may be worth checking to see if you can get it any cheaper.

And if you don’t have cover, you may be surprised to see how competitive the price may actually be. You could also investigate the benefits of options such as critical illness cover which pays out on the diagnosis of one of a range of serious illnesses.

To find out more, why not arrange a no obligation consultation by calling or emailing your adviser.

For more information on the how much life insurance you may need to protect your dependants, email or call us now.

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Climate change is leading to extremes in our weather and the experience of the summer 2007 floods came as a shock to many homeowners who did not consider that they were at risk.

Even the insurers were caught out as many of the problems of last summer were caused by flash floods and inadequate drainage which did not really feature in their previous risk modelling.

According to the Association of British Insurers, it’s currently estimated that in the UK more than 2 million homes are at risk from inland or coastal flooding – that’s around one in 100 of all residential properties! Of these around 400,000 homes are considered to be at a very high flood risk, deemed to be at least a one in 75 annual chance, and the number of exposed properties has increased substantially in the past five years.

The average household flood claim is currently in the range £15,000 to £30,000. As well as damage and repairs, such claims often include the need to find alternative accommodation, possibly for weeks or even months when the affected property is repaired.

However, different types of flood damage are likely to be covered by different types of insurance policy. While the cost of damaged plasterwork and alternative accommodation usually comes under buildings insurance, the cost of replacing carpets, furniture and other belongings generally requires contents insurance.

Flood damage to your car would only be covered by a fully comprehensive motor insurance policy, while any damage caused by your car floating away and hitting another vehicle should be covered by a third-party policy.

Britain is currently the only country in Europe where flood insurance is relatively widespread. At the current time, the UK insurers are still committed to continue offering cover to existing customers in flood-risk areas, but this is subject to government improvements to flood defences.

However, if you do live in an area which is at risk of flooding – or are considering moving to an area which is, such as a flood plain, then a major problem you could encounter at some point in the future, is that the insurer may decline to renew your cover.

Even assuming this does not happen, flood damage can seriously undermine the market value of your property. The fact is that you cannot insure such a loss.

If you are concerned about the potential impact of flooding on your property, then we can offer you detailed advice and guidance on the terms and conditions of your current policy, including such details as single item limits, excesses and exclusions – and if necessary update them. This could be particularly worthwhile if you have acquired new possessions but have not increased cover limits recently.

For further information on home insurance in flood-prone areas and advice on the scope of your current policy, email or call us now.

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A number of clients have requested advice on the best type of loan, for example, to carry out home improvements.

Generally speaking, you have three choices – an unsecured loan, a secured loan, and a remortgage. While a secured loan or remortgage may have a lower interest rate, you need to think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

The big advantage of a secured loan or a remortgage is that they offer lower interest rates than unsecured loans. The main disadvantage is that they are, of course, secured on the value of your house, which may make them less flexible in some circumstances than unsecured loans.

However, if the value of your house has increased considerably over the years, you may now have considerable untapped equity in your home which may make a remortgage or secured loan a suitable option.

So, what are the pros and cons when it comes to deciding between an unsecured loan, a secured loan and a remortgage?

Unsecured loans

• If you have repayment problems then your home is not directly at risk
• Portable if you move home
• Have higher rates of interest than secured loans or remortgages
• Not regulated by the Financial Services Authority

Secured Loans

• Lower interest rate than on an unsecured loan
• May not be portable if you move house
• Not regulated by the Financial Services Authority

Remortgages

• When all associated costs are taken into account, is not generally cheaper than a secured loan
• May lead to loss of incentives on current mortgage, while a further advance would leave them intact
• Regulated by the Financial Services Authority

Before taking out a loan you should consider if you really need to raise money at all. Whatever you borrow you have to pay back, so it may make more sense to save the money before you buy.

However, if you do need a loan it pays to take good advice as there are many options available. Whichever route you prefer for raising finance, we can advise you on a comprehensive range of options to meet your specific circumstances and requirements.

Please note that your home may be repossessed if you do not keep up repayments on your mortgage.

For further information on different types of loan and advice on which is the most appropriate for your circumstances, then call or email your adviser.

For further information on different types of loans and advice on what is most appropriate for your circumstances, then call or email your adviser now!

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Are you facing a significant increase in your mortgage interest rate because your current loan is approaching the end of a fixed-rate term?

If the answer is yes, then why not give us a call? We are experienced mortgage brokers and have access to a large range of the most competitive loans in the marketplace – many of which are not available on the high street.

What’s more, we may also be able to offer you cost savings in other important areas related to your home.

We are fully authorised to offer expert advice relating to a broad range of insurance products, including mortgage term assurance, life assurance, buildings and contents insurance, and mortgage payment protection insurance. As with mortgage products, we have access to the best and most competitively priced products in the marketplace and the chances are that we can save you valuable pounds without reducing the quality of the products on offer.

So, if you’re looking for a good mortgage deal, or have any household or homeloan related insurances coming up for renewal, or if you just want to see if you can get a more competitive quotation to compare with an existing product, then get in touch.

For professional advice and detailed mortgage and insurance quotations, then call oremail or call us now.

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When it comes to buildings and contents insurance, it's not uncommon for people to be underinsured. This could be because they underestimate the rebuild value of their house, they underestimate the value of their possessions, or they just want to save money.

The potential scale of the problem some people may face was illustrated by research carried out by the bank Abbey(*). This  revealed that up to three million households may have no home contents insurance at all, while up to 3.4 million households do not know whether their home contents policy covers them for the full value of their belongings.

Skimping on your insurance cover can prove costly. The first point to note is that if you are underinsured and make a claim, the actual sum you are insured for serves as a limit. If your contents are actually worth £30,000, you will not receive more than £15,000.

What’s more, if your claim falls within the sum you have insured, you may not receive the full amount of that claim. In some cases, it is not unknown for insurers to penalise significant underestimates. This is because insurers will, as a general rule, replace old items with new ones and the current cost of an item can be significantly higher than when it was originally bought.

Another area to consider is to what extent your possessions are covered if they are lost or damaged outside your home.

If you want an accurate estimate of what your possessions are currently worth, and therefore how much insurance cover you should take out, then you need to value them at current prices.

Saving money on your premiums by underestimating the value of your home and its contents may cut costs in the short-term. But if the worst happens and you make a substantial claim, you could find yourself penalised or unable to afford replacement items.

When it comes to buying contents insurance the key is to buy the cover that best suits your needs. While shopping on the Internet may appear a good option, with many firms offering online discounts, in practice it may not actually offer you the best value or the most appropriate cover.

As an insurance broker, we can conduct a thorough fact find of your needs and identify the best policy for your requirements and, quite possibly, save you some money too – for your buildings insurance as well as your contents cover.

For more information and to discuss your household insurance requirements and the options available, then email or call us now.

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