So far, all this is completely straightforward. In a free market, you can make savings and the insurer gets more business. This should be a win/win situation. Except, in some states like North Carolina, the free market is being twisted by some insurers. The strategy adopted by some of the larger companies like Allstate is aggressive, writing to existing homeowners policyholders to refuse renewal unless they switch their vehicle insurance to a bundle. In some states like New York, this forced bundling is illegal, breaching provisions on anti-rebating and anti-discrimination. In states where this is legal, the insurers justify this mandate on the basis of their business economics.

It’s a fact of the business that insuring people’s vehicles is highly profitable, but insuring homes is break-even or potentially loss-making. When you look at the last two years, the majority of companies have made a loss because of the increasingly bad weather. Indeed, 2010 was a record-breaking year for claims and this year has already passed the 2010 total. In the past, the insurers would simply have raised their premium rates to cover the losses, but most states now cap rate increases. Insurance Commissioners have become more protective of consumer rights. This means insurers are trying to get back into profitability on homeowners policies by forcing people to transfer insurance for their vehicles. It doesn’t work the other way round. Because vehicle insurance is profitable, there’s no requirement to bundle a homeowners policy. Indeed, given the choice, many insurers would no doubt like to terminate all homeowners policies.

So when you start shopping around and ask for auto insurance quotes from all the top companies in your state, remember to look carefully at their bundling rules. It’s entirely possible there will be nothing but good news with discounts you can enjoy without penalty. But be very careful to read the small print. You should also consider what your reaction will be if, as in North Carolina, you suddenly get a letter from one insurer requiring you to cancel policies with another insurer and consolidate all policies with the one insurer. First get auto insurance quotes with a view to changing insurer and then make a formal complaint to your Insurance Commissioner. The more people who complain and move their business, the better.

Many insurance companies are already increasing the deductible whether you asked for it or not. The reason for this is the rise in the number of claims from bad weather. No matter what your view on global warming or climate change, the last two years have seen record-breaking claims for damage caused by snow, flooding, tornadoes and hurricanes. This year is ending on another unusual note with unexpected snowfall disrupting the northeast in late October, early November. The amount of snow and disruption to more than 2 million homes has broken new records for October for West Virginia through to Maine. All these additional claims mean premium rates will be going up again next year, and the deductibles are being adjusted on a take-it-or-leave-it basis. Don’t be caught out. Before you raise the deductible yourself, find out what your insurer has done. Second, if you do increase the deductible, can you afford to self-insure all the small accidental losses around the home? If not, resist rises in the deductible.

Now on to the other discounts. In the good old days before the internet, people used to rely on the agent to claim all the discounts. These people knew you and your home. They understood the inner working of the insurers. They used to protect you (well, they were supposed to protect you). Now you have moved online, you are the only one who can look out for your own interests. There are a range of monitors and sensors you can fit to your home that will save you money. The details will vary from company to company so, before you spend any money, get a list of the approved devices and cost their installation. Never fit anything unless you can recover the cost in savings within a reasonable period of time. These include central station alarm systems for both unauthorized entry and temperature rises, smoke, water and gas leaks, and so on. Whenever you renovate, ensure your rebuilding cover is increased and that you gain access to the discounts.

Finally, revisit the question of bundling policies together with the same insurer. Almost all companies will give you a discount if you give them more business. So if you have one or two family cars, giving the same company both the auto and homeowners insurance policies can represent at least 10% in savings. This needs quite careful research to confirm. Get as many quotes as possible for individual cover with different companies, and then look at what savings you will get if you bundle with any one of them. Never assume one of your existing companies will give you the best deal. Always shop around and get as many car and homeowners insurance quotes as possible.

When you recover from the shock, you should ask why the range of the estimate is so wide. The answer is depressing. Although the FBI is on the case, it does not begin to have the resources to investigate the full extent of the problem. All it can do is to base the estimate on samples taken from different sets of files. Think of the top and bottom numbers as being the worst and best case scenarios. Your curiosity is piqued. How can the losses be so great? Does Medicare and Medicaid not have anti-fraud systems in place? Now comes the real killer. The administrations of both the entitlement programs have a “pay and chase” approach. This means they unquestioningly pay all claims and only if evidence later emerges of a possible fraud do they then chase for repayment. Needless to say, most fraudsters are rarely in a position to repay in full (or at all depending on how much time has passed). The result is massive fraud. It begins with health professionals billing for work they did not do and for treatment they did not deliver. Pharmacists invoice for drugs supplied even though there are no prescriptions written. And then, of course, come the actual criminals who set up fake clinics to bill insurers and the entitlement agencies. They last for a few months before disappearing.

To help fight the battle, some of the local FBI agencies are buying billboard ads begging us to act as whistleblowers and turn in the doctors we see billing the health insurance companies for tests and treatment we did not receive. Why should we care? Because when you add up all these false items on legitimate bills, these are billions paid out by insurance companies and the federal government. So those of us who pay health insurance premiums are paying way too much. Those of us who pay taxes are seeing billions of our tax dollars paid out to fraudsters instead of legitimate claimants who are ill. So the federal authorities should immediately withdraw the “pay and chase” policies. No suspicious claim should be paid. If this needs more staff, this creates jobs and is good for the economy. If it saves money, the jobs will be self-funding.

Under Obamacare, there’s a new accent on preventative care. The earlier the diagnosis, the more cost-effective the treatment. If access to reproductive care is also classified as preventative, this will have profound implications for the health insurance debate. This will open up a new war of words between the liberal establishment that favors funding women’s healthcare, and the GOP which campaigns aggressively to withdraw funding from any healthcare service that directly or indirectly supports abortion or fails to emphasize abstinence rather than contraception. So, because these health insurance issues should be resolved during 2012, we can expect men to begin debating how much healthcare women should receive.

The debate over car insurance price discrimination has been a long and heated one. Traditionally male drivers were charged with higher premiums because they were more often involved in accidents if compared to female drivers. And knowing that the insurance providers deal only with risk factors when calculating their rates as a result female drivers were always getting better rates then men. There are a lot of explanations of why female drivers are less risky then men behind the wheel. Male drivers tend to be more aggressive on the road, driving faster and taking more risks. And this of course leads to more accidents and insurance claims filed by men. So, in fact the math behind such discrepancy in rates for different genders can be understood.

Still, knowing how the EU acts regarding any type of discrimination this car insurance feature was set to become the subject for discussion sooner or later. And what may look like a call for justice from the lawmaker and political point of view will certainly give the insurers a bit of a headache when deciding how to comply with the new rules. Because the usual methods of calculating insurance rates for different groups of drivers will have to be reviewed in order to exclude gender discrimination among customers.

Now it depends on how the insurance companies will choose to review their rate calculating methods in order to avoid price discrimination. One thing’s for sure, the insurance companies won’t let the new rules affect their revenues in any way. So it’s very likely that they will simply even out the extremes. This means that young male drivers will be charged with lower rates whereas adult female drivers will get higher premiums as to compensate the shift in rates for other car owner groups. And that’s the price we have to pay for eliminating discrimination.

Automation brings reduced premium rates at two different levels depending on where the savings in labour are made. If the insurer has to employ a call centre full of people (hopefully not offshore to maintain what employment opportunities remain for local people), this is a moderately expensive operation. But if all the selling of policies is effectively automated, all the savings in labour costs can be passed on to you as discounts. For example, the Co-operative offers an 11% discount for buying online. When you add this to other features like a no-claims bonus rising to 70%, it makes them one of the cheapest companies in the insurance business.

But, the most interesting company is Swiftcover. Although set up as an independent, this is now a subsidiary of the Axa Group, selling out in 2007. It’s advertised as the first company relying 100% on the internet to sell its policies and deal with claims. To a greater or lesser extent, all the other major companies have a mixed strategy depending on face-to-face sales through High Street offices, the telephone, the internet and indirect sales through agents and brokers. Through Swiftcover’s website, you can buy a policy online and print out your cover note. If there are any changes to be made to the policy, this is done online. In the unhappy event of having to make a claim, you have a choice of an online process or a telephone call. This is a prize-winning company for its innovation and the cost-savings it offers. Although it now employs some 250 people in England for dealing with more than half-a-million policyholders, this is a fraction of the workforce in other major insurers.

So, when you look at the UK car insurance market, Swiftcover is leading the way in offering real competition to the established brands. Although some report its performance has dropped since it sold out to the Axa Group, this is the spur keeping the majority of companies offering cheap car insurance cover. When you’re coming up for renewal, check out all the car insurance quotes coming through the search engines. If Swiftcover is not among them, get a quote direct and compare. Similarly, look for the promotional offers being made for buying direct through the internet. There are some real bargains to be made.

Coming back down to earth more gently, not every child can be a star. The most they will hope for is earning a few dollars babysitting or mowing the grass in neighbors’ yards. Yet there can be direct benefits in taking out insurance while they are young. Let’s start with an advantage that will continue to blight those seeking insurance. Although the Affordable Care Act will prevent insurers from denying healthcare cover to those with preexisting conditions (assuming it survives the challenge from the Supreme Court judges), it remains a problem or those wishing to insure their lives. Obviously, insurers are trying to estimate how long you are likely to live so the right premium rate can be set. If you have a condition likely to cause your death in a few years, the insurer will gracefully refuse to quote. But if you insure your child long before any disease or disorder has a chance to appear, this locks in cover and potentially represents the best gift you could ever give your child. This assumes, of course, there is no family history of life-threatening diseases which would have to be disclosed and might trigger rejection. Even more importantly, the cover you buy will usually have a low premium rate. If you are proposing to insure from the age, say, of five years, the premium is likely to be twenty years cheaper than the equivalent for twenty-somethings who insure their own lives.

There’s also a selfish reason for this type of insurance. Should your child fall ill, you might want to take time off work to look after him or her. The policy will make good on your lost pay and any medical expenses you have to pay out of your own pocket. So there you have the possibilities set out. You might think even cheap life insurance for your children is an unnecessary burden to add to your family budget. It would only be valuable if your child fell ill and you built up debts trying to save his or her life. Or you may think this type of life insurance is a good gift, particularly if it comes with a cash value. Over a child’s long life, this could grow into a significant fund.