News: Insurers warn of rising cost of climate change

Home cover hike; unwed couples; child trust funds; endowments
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The Independent Online

The annual global cost to insurers - much of which is passed on to customers in higher premiums - could rise to £15bn by 2080.

But this bill could be reduced if governments were to cut carbon emissions, improve coastal and flood defences, and develop weather-proof buildings, the ABI concluded in a new report.

Incidences of flooding were the biggest single climate-related factor behind the rising cost of property insurance in the UK, the ABI found.

Boscastle, in Cornwall, and Carlisle have both suffered severe flash floods in the past 12 months. Damage ran into tens of millions of pounds, quite apart from the human misery inflicted.

End of the affair

Cohabiting couples on the verge of splitting could have their financial pain eased thanks to new government guidelines.

Advicenow.org.uk, a legal advice website backed by the Government, published a "breaking-up checklist" last week to make cohabitees aware of their legal status. This focused on how to resolve shared mortgages, bank accounts and debts. For example, joint bank accounts should be closed as soon as possible, as both partners remain legally responsible for debts subsequently run up.

The online checklist is part of the Living Together campaign, funded by the Department for Constitutional Affairs, aimed at dispelling the popular myth that so-called common-law marriages have legal recognition.

While the law is clear about the division of married couples' assets, this is not the case for their unmarried counterparts. The Law Commission is soon to begin a review of the rights of such couples in England and Wales.

Baby vouchers for all

The first child trust fund (CTF) to comply with Islamic Sharia law, which prohibits the payment of interest, is to be launched in September. Children of Muslim parents who observe the law have not been able to benefit from a £250 CTF voucher so far. However, the Children's Mutual friendly society has devised a fund investing in companies pre-approved by a board of Islamic scholars. To date, barely one in three eligible families in the UK have invested their children's vouchers.

The Advertising Standards Authority last week criticised as "misleading" a CTF advert which it said failed to make clear that the value of a stakeholder CTF could go down, not just up.

Mortgage misery

Complaints about endowment policies have risen to record levels and now make up two thirds of all disputes involving the financial services industry, the Financial Ombudsman Service said.

The Ombudsman investigated 70,000 new mis-selling complaints in the last financial year - equivalent to 1,300 a week, and up from 300 a week in 2001. Even more are expected this year.

Millions of homeowners took out endowment policies to pay off mortgages in the 1980s and 1990s but many now face shortfalls.

One problem has been the failure of lenders to deal with endowment complaints properly. In May, the Financial Services Authority fined Abbey £800,000 over its mishandling of such complaints.

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