Insurance Guidance for conversation on insurance Trainers Notes for discussing insurance with clients
This session pack has been produced as part of Citizens Advice Financial Skills for Life. Key partner Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, Citizens Advice assumes no responsibility. The user of the information agrees that the information is subject to change without notice. To the extent permitted by law, Citizens Advice excludes all liability for any claim, loss, demands or damages of any kind whatsoever (whether such claims, loss, demands or damages were foreseeable, known or otherwise) arising out of or in connection with the drafting, accuracy and/or its interpretation, including without limitation, indirect or consequential loss or damage and whether arising in tort (including negligence), contract or otherwise. Copyright 2015 Citizens Advice All rights reserved. Any reproduction of part or all of the contents in any form is prohibited except with the express written permission of Citizens Advice. Citizens Advice is an operating name of the National Association of Citizens Advice Bureaux, Charity registration number 279057, VAT number 726020276, Company Limited by Guarantee, Registered number 1436945 England. Registered office: Citizens Advice, 3 rd Floor North, 200 Aldersgate Street, London, EC1A 4HD 2
Insurance The aim of this session is to help advisors to provide a session to clients that introduces them into basic insurance products. This session is very brief as any detailed queries require a level of formal debt and financial advice that an advisor should signpost for. Objectives are that by the end of this session clients will be able to: List different types of insurance and their features Use comparison sites to compare quotes General guidance notes on delivering a group financial capability session are available elsewhere on the Citizens Advice website. These notes are for the trainers use only. A separate handout pack should be used with every client in the group, which will include signposts for further information and guidance. Trainers are encouraged to feedback to the Financial Skills for Life team with any feedback about training materials or resources. If you have any comments, please contact: financial.skills@citizensadcvice.org.uk 3
Contents Session Specific Guidance 5 Lesson Plan 7 1. Types of Insurance 8 2. Shopping around for insurance 9 3. What else will help? 10 Evaluation 11 Trainers notes 12 4
Session specific guidance Subject information Trainers do not need to have specialist money advice knowledge or experience but must have a basic understanding of the different types of insurance and be able to signpost learners to sources of further advice and information. The pack contains all the key information for the topics covered. Any additional information that is given should be taken from an up to date and accurate source such as: the Citizens Advice website the Money Advice Service at www.moneyadviceservice.org.uk This session aims to help learners understand the basic insurance products available to them. For more information, learners should be referred to their local Citizens Advice or other advice agency. Materials Blank flip chart paper Marker pens Note paper and pens for learners Blu tack Calculators Prepared cut-outs for word-matching activity Manage expectations Make it clear to clients that the session is a brief overview of insurance products, and the most essential elements of financial capability that relate to it. As a one-off session, there will not be the time to explore any single element in any great detail. Signpost and empower Ensure that clients are aware that after the session they will have a clear idea where to go to answer outstanding queries and to get further assistance. 5
Top tips 6
Exempt from the Adult Financial Capability Framework Lesson Plan 1 2 This session is intended to take about 30 minutes to deliver. 3 Activity Two requires an internet connection as it is based around online comparisons.. Green activities Are essential to any session on this topic Amber activities Are highly recommended but not essential Red activities Are optional activities, if time allows The size of the bubble indicates roughly how much time, relative to the session, to spend on an activity. 7
Activity: Types of Insurance Give learners a couple of minutes in their twos/threes to discuss what different types of insurance there are and what the different reasons for having them might be. During the following discussion, use the eight information cards (on the attached handouts) to discuss the pros and cons of different types of insurance with clients. If this was useful, why not try Budgeting is an important one to cover if clients are unsure if they can handle another regular expense. For clients looking at insurance to cover illness and job loss, they may want to look at Jobs and Employment If comparing different insurance providers, they may want to try the Money Online section, or the Digital Money Coach Toolkit. 8
Home buildings insurance This covers the cost of rebuilding or repairing or repairing your home in case anything happens to it. That includes floods, fires, earthquakes, lightning damage and things like subsidence. It s a legal requirement if you have your own home, in fact most mortgage providers won t lend to you if you don t have it. not included. Home contents insurance This covers the cost of replacing your possessions in case they are damaged or are stolen. This can also cover some things you might carry on you, like phones or laptops. It doesn t cover things like wear and tear, but can often cover accidental damage. not included. There might be an excess to pay and some items are only covered if you make sure the insurance company knows you have them. Pet insurance Veterinary costs are always going up. Although they are infrequent costs, an ill or injured pet can prove to be a very expensive unexpected cost. If you think that it will be worth it in the long run, pet insurance is worth considering. not included. 9
Car insurance You legally have to have insurance if you drive a car. There are three types: 1. Third party covers other people if you are in an accident, but you have to cover any damage to your own car yourself. 2. Third party, fire and theft is like the previous type, but also covers fire damage and if your car is stolen. You still have to cover any damage to your own car from an accident though. 3. Comprehensive covers everything. This type of insurance can be very expensive for younger drivers. not included. Guaranteed asset protection (GAP) insurance This is a type of insurance that confuses a lot of people. Eessentially, GAP insurance only applies if you write off the car completely. It pays the difference between whatever the insurance company pays you for the write-off and what you paid (or owe) for the car. The whole point is that you re not left out of pocket or owing money for a car you no longer have. It is completely optional, so think carefully whether it s worth it. not included. 10
Travel insurance Unlike the UK, most countries do not have a national health service. This means that if you need medical treatment abroad then you would have to pay for it. Travel insurance covers this up to a potential 1 million and also covers: Personal liability, if you re sued for damaging property or causing injury Lost or stolen bags The costs of cancelling, delaying or cutting short your trip not included. Life insurance / Critical illness cover / PPI These are all different types of insurances, but essentially they pay out if you meet the criteria in the policy. This may mean that they pay out on your death, or if you develop a critical illness, or lose your job. However, they all have lots of small print which you would need to check to make sure you know what s covered. not included. Medical / Dental insurance Most of your medical and dental costs will be covered by the NHS. However, if you would prefer not to use the NHS, or want treatments the NHS does not provide, then you may wish to get private healthcare. This is can be very expensive and insurance can cover some of these costs. not included. 11
Online activity: Shopping around for insurance This activity requires use of a tablet/computer as it focuses on online comparison sites. The client should be advised to look at more than one site, however, as with other websites/search engines the client is likely to choose the one that is suitable for their navigation skills. The client may have a preferred provider of a product but can still be encouraged to look at comparison sites to gain an understanding of how many options are available. However, clients should be directed to reputable sites and to be cautious when filling in personal details. Recommended comparison sites are: Go compare Money supermarket Compare the market Which? Money compare Uswitch Note that these websites can save the client time but will potentially require around 10-15 minutes to complete. However, clients should be aware that they shouldn t rely one just one comparison site. It is also essential that the client put the correct information into the site, failure to do so could result in invalidating an insurance or offer. Therefore, something like car insurance may require the client to check their previous car ownership or driving history before they go onto the site. Remind clients that they should also consider if it is the right quote/ product for them, rather than just being the cheapest. If this topic was of use, why not try... Other resources from the Digital Money Coach Toolkit? 12
Activity: What else will help? Using the attached handout to ask the client to pick which topics they think will help them improve their budgeting skills. Reassure the clients that all these topics are options that they can cover with their local Citizens Advice if they want to. Make sure you take the sheets in from the clients; these can then be kept on their records. They also provide valuable feedback for the Financial Skills for Life team and copies should be returned with the session s feedback forms. If the client finds the following interest, why not try Having cheaper bills Budgeting Maximise income reduce outgoings Energy and Water Saving energy in the home Understanding how to budget Budgeting Budget building guide Knowing where to get the cheapest gas and electricity Energy and Water How to switch energy companies Understanding payslips and job-related paperwork Jobs and Employment Payslips Knowing the best ways to save and to borrow Credit Ten credit tips factsheet Tips to save money on everyday things Tips to make more money from everyday things - Try the Consumer Education pages on the Citizens advice 13 website.
Evaluation 14
Trainer notes 15