Month: January 2023

Some Reasons For Motor Insurance Rate Rises

According to the statistics it appears that we are seeing yet higher prices for our motor insurance. On almost any other service or product if there was an increase of 50% there would be a huge outcry. Yet, for some bizarre reason many motorists just hand over the requested premium.

‘Cash-for-crash’ fraudsters are being blamed for much of the rise in car insurance rates. This is where people stage crashes so they they can then make claims against the insurance company for injuries they might (or might not), have sustained.

Also being blamed is the compensation culture so common in the US. Personal injury lawyers with their motto ‘no win no fee’ are popping up all over the place. And nowadays a minor bruise can be worth a few hundred pounds if there is some slight psychological damage. And it seems that the UK is well into the insurance claim game when compared to other European countries where a dent in the wing is almost like a badge of honour and just part of everyday life.

The police can now seize uninsured motors, but much of the time the offender gets away with no real punishment when it reaches court. The criminal driver simply weighs up the cost of having insurance against not having any insurance and losing the car and paying a small fine. Although not in every case, the uninsured motorist often runs a banger of a car that is worth very little value.

Whatever the causes behind these jumps in insurance rates it usually pays to shop around and see if you can get a better premium than the one you are being asked to renew at. If you get a special introductory deal don’t expect the same next year from your present insurance company. Be prepared to haggle, your provider wants your business and is often prepared to match one you have found that is genuinely lower.

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Extra Life Settlement Brokers Aren’t Helpful

On occasion, consumers or advisers try to hedge their bets by utilizing multiple life settlement brokers simultaneously in the sale of an in force life insurance policy. However, life settlement brokers will often decline the business if they know they are the second or even third broker offered a potential case. The simple reason is that multiple life settlement brokers don’t serve anyone’s best interests.

A life settlement broker is by definition a fiduciary, who represents only the policy seller. They are a representative tasked with negotiating the best settlement price possible for their clients. The role is analogous to a real estate agent or an attorney that fights on behalf of their client to secure the most advantageous outcome. While counter intuitive in those situations to have multiple representatives, many policy sellers readily assume utilizing more than one life settlement broker will equate to a more lucrative sale of their life insurance policy. Unfortunately, the opposite is most likely true.

Policy sellers sometimes believe they are creating competition by submitting their policy through multiple brokers. However, the competition that ultimately drives the price of a policy is between the buyers, not the brokers representing the sellers.

Policy sellers also assume that different brokers will have access to different buyers. Therefore using more brokers equates to more potential funding sources. This is true, but to a very limited extent. Established life settlement brokers usually submit policies to the same overlapping group of institutional buyers. While each broker might have a few buyers that another might not, the benefit gained by using multiple brokers is minuscule compared with the complications the situation inherently creates.

As part of the life settlement process, brokers must first pay for records and underwriting services that are required by most prospective buyers. This capital outlay can sometimes exceed $1000 to third party vendors. When policy sellers hire multiple brokers, that expense is duplicated by all brokers involved with the policy, while only one will be able to generate revenue from the transaction. The cost of acquiring the requisite information for each case must ultimately get passed along in the form of broker commissions. The more unnecessary expenses that are incurred with a muddled case, the more a broker must collect in other cases that do close successfully.

If life settlement brokers are analogous to a seller’s agent in a real estate transaction, then life settlement providers are similar to a buyer’s agent. Once a case is received by a life settlement provider from a broker, that broker is assumed to be representing the seller. If the case is subsequently received from another broker, that broker’s submission is usually rejected. This is because a buyer wants to only deal with one party. If there are multiple brokers involved, the buyer is unsure of which party is actually representing the seller. Who should the buyer negotiate with? Who has the ability to speak for the seller? Multiple representatives unnecessarily confuse the transaction.…