Julian Knight: Insurers' stance is as clear as a cloud of volcanic ash
Sunday 18 April 2010
Have to hand it to those Icelandics, for an island with a population the size of Hull, they can't keep out of the news.
Not content with using billions of our savers' cash to fund their casino banking operations (and getting shirty when we have the temerity to ask for it back) their bilious volcano has grounded all our planes – not such a bad occurrence when you live on a flight path, like me. The response from insurers was, as ever, confused. One minute travellers are covered, another they're not. It's been reported widely that the volcanic eruption is classified as an Act of God (What happens, I wonder, if you're an atheist? Does "Act of God" not apply?) which means that travellers' losses are technically not covered.
Now, this is a bit of misnomer, because Act of God is a legal term – meaning events outside human control – and has nothing to do with insurance. There has never been an Act of God exclusion in insurance. Instead, they rely on the get out that only those events that are specifically mentioned in the policy are covered, and everything else – apart from events said to be excluded – is at the discretion of the insurer as to whether they pay out or not.
As a result, policyholders are left in limbo – whether or not something ends up being covered is often directly related to how much fuss the media kick up. With the Icelandic volcanic eruption it looks like most insurers are going to do the honourable thing (as they did with swine flu and the chaos at Heathrow Terminal 5) and pay up. But why is it that every time we see something out of the ordinary we have to go through this game of chicken with the insurance industry?
Instead of insurers having discretion, here's an idea. Policies should sum up the main points of what is covered – for travellers this would be stuff such as personal injury, medical treatment or luggage loss – and then they should list what definitely isn't. And any events which fall between the cracks, so to speak, should be covered automatically. In other words, take insurer discretion out and let consumers clearly see the circumstances where they will and won't be paid.
What a rotten business
Despite the sight of former Northern Rock deputy chief executive David Baker nearly in tears when apologising publicly after being fined half a million by the Financial Services Authority for mis-reporting the status of the Rock's loan book before the bank run in September 2007, there is no doubt that he and former credit director Richard Barclay got off lightly.
In the US, the Rock twosome would probably have faced trial and the prospect of years in jail. But Baker and Barclay aren't the only ones to blame. What about the executives who thought it was a bright idea to start offering the notorious Together mortgage at an LTV of 125 per cent? Their actions were really only the finishing touch on what was a thoroughly rotten business.
And what about the other rotten businesses? RBS, for instance. Will we see Fred the Shred Goodwin fined and banned by the FSA for managing the bust of the then world's biggest bank? What about HBOS, with its irresponsible lending practices, or Bradford & Bingley, which dived head-first into the murky sub-prime universe?
Then there are the building societies – Derbyshire, Cheshire and the Dunfermline (the last of which the Scottish nationalists laughably tried to claim was a case of economic wrecking by London rather than what I believe to be the most incompetent management action in the history of UK financial services). There are so many men in suits to blame – where does it all end?
Keep tax-cut cash in pensions
The Lib Dems say in their manifesto launch that they want to abolish higher rate tax relief on pensions. Now, I agree with them, but not on how the money is used. It is ridiculous that four-fifths of the tax relief on pensions savings go to the highest earners. The Lib Dems want it to fund what amounts to an income-tax cut – which will just get blown in many instances on a holiday, car or big telly. I'd much rather keep it invested in pensions, but how? Use the money to raise the basic rate of tax relief from 20 to 26, 27 or even 28 per cent, thereby incentivising millions more on average earnings to save.
Mark Dampier: Don't panic. Canny investors sit tight when the stock market falls
Shareholders can hold a company to account
Derek Pain: Dividends ease the suffering in a moribund stock market
Questions of Cash: Payment woes with Barclays overshadow Cornish holiday
Bank-beating exchange rates on your international payments
- 1 Revolutionary lost Caravaggio painting 'Mary Magdalen in Ecstasy' identified
- 2 McKamey Manor: This 'extreme' haunted house is the stuff of nightmares
- 3 Russell Brand says he will 'probably' give up acting to focus on his revolution
- 4 Watch what happened when food critics were unknowingly served McDonald's
- 5 David Beckham's Haig Club whisky is exactly what’s wrong with the Highlands
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Tony Blair 'says Ed Miliband will lose 2015 general election'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Putin: The US is to blame for almost all the world's major conflicts
iJobs Money & Business
£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...
£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...
Day In a Page
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village