There’s no snow in my ski resort – can I get compensation?

Thousands of holidaymakers going on skiing trips are dismayed at reports of bare slopes, with dry conditions meaning many resorts have been reliant on snow cannons.

It’s been a terrible week for skiers, and there are fears entire resorts will have to close as drought warnings mean snow cannons have to be switched off. A more positive forecast suggests this may now be avoided – but if you have been unable to ski, can you claim compensation?

Will my holiday be affected?

Some parts of the Alps have seen more snowfall than others, so it depends on the resort you are visiting.

According to website, conditions are improving in the Alps, with some resorts in Austria and Switzerland benefiting from snowfall.

More snow is forecast, so things are looking up. However, many pistes and lifts are still closed, limiting skiiers’ options.

And if your holiday was booked during the period when many pistes were closed, this will be little consolation.

If you’re heading to Canada or America conditions have been very good and you should have no problem finding somewhere to ski.

Am I covered?

It depends on your insurance policy. If you have a winter sports policy then it should include compensation for days you cannot ski.

However, it is unlikely that a lack of snow will be accepted as a reason to cancel the holiday altogether, though some specialist policies provide this.

Many policies also won’t cover you if your resort is below a certain level, for example 1,600m, or if you took out the cover within 14 days of the holiday, unless you booked the trip at the same time.

If you haven’t bought insurance yet, buying it now with a view to claiming compensation will be seen as fraudulent by insurers, who will check whether the poor conditions were “public knowledge” at the time you bought the insurance.

How much compensation can I get?

It depends on the policy, but insurers generally pay out around £25 to £35 a day for piste closure.

It’s designed to cover the cost of travelling further afield to find snow, or of alternative activities.

This only kicks in if it’s been impossible to ski – so will not pay if even a small bit of the resort is open.

It may also be scant consolation for skiers who have paid out hundreds on flights and hotels.

For example, Nationwide will pay out £35 a day per insured person, up to a maximum of £525.

Some insurers, such as LV, will also pay out for the cost of unused lift passes, guides, equipment hire and tuition.

However, the insurer will not cover you for costs if you cancel or cut the trip short.

You have to provide evidence from a tour operator or resort manager that pistes were closed.


Auto Insurance Market to Shrink by 70% by 2050: Report

Autonomous vehicle technology, a rise in on-demand transportation and a shifting of liability to manufacturers will shrink the auto insurance sector by more than 70 percent or $137 billion by 2050, according to updated research by KPMG.

In a 2015 report, KPMG said the market would shrink by as much as 60 percent by 2040.

KPMG has said it extended its actuarial model by 10 years to 2050 and found that the pace of change has accelerated, pushing projections that illustrate greater declines to the insurance sector than KPMG’s previous 2015 study.

The updated study, The Chaotic Middle: The Autonomous Vehicle and Disruption in Automobile Insurance, also shows an increasing need for new types of insurance products.

KPMG said it now believes that traditional auto insurance carriers are facing the threat of obsolescence with auto manufacturers becoming the alternative to covering driving risk.

Chris Nyce, principal in KPMG’s Actuarial and Insurance Risk practice, said that building the latest observations into the actuarial model affirms the “projected long-term decline in the number of auto accidents overall, and the share of accident claims funded by personal auto policies will also contract.”

KPMG sees a 90 percent reduction on loss frequency by 2050. That along with severity declines and the effects of mobility on-demand transportation will mean a 71 percent drop in total losses, or $137 billion. The biggest effect will be felt by personal lines auto insurers— by 2050 only 22 percent of auto loss will be in personal auto.

Partially offsetting this, average repair costs will continue to increase at a higher rate than overall inflation as new technologies in future cars become more expensive to repair, Nyce said.

According to the consulting firm, three major forces are disrupting the current, $247 billion premium, auto insurance marketplace:

  • Autonomous technology is making cars increasingly safer, leading to a potential 90 percent reduction in accident frequency by 2050.
  • Auto manufacturers (OEMs) will assume more of the driving risk and associated liability, and have new opportunities to provide insurance to car buyers, taking market share away from traditional insurers. KPMG estimates that by 2050 there will be a significant increase in products liability insurance to 57 percent of total auto losses in order to cover the autonomous technology in vehicles, and a considerable decrease in personal auto insurance to 22 percent of total auto losses.
  • The rapid adoption of mobility-on-demand is quickly translating into the need for less personal auto coverage, with the use of fleets requiring commercial auto insurance.

Between now and 2019, consumers will begin experiencing the safety advantages of new technologies and attitudes will shift towards acceptance of autonomous driving, according to KPMG. Also the first autonomous cars will be on the roads. On-demand transport and car-sharing will continue to expand. By 2024, the majority of travel within cities and surrounding suburbs will be on-demand rather than with a personal vehicle, and by 2035 on-demand will be the norm in transportation, according to KMG’s projections. As a result, products liability coverage and other new types of insurance are expected to pay a greater share of claims resulting from roadway accidents.

KPMG said cyber risk is an example of a new type of risk associated with the era of driverless cars, and there will be a need for new products to cover the potential hacking of autonomous vehicles.

The trends seen by KPMG are in keeping with a report by Allianz Global Corporate & Specialty (AGCS) on the effect of technology on insurance. The report that found autonomous cars will reduce accident rates, shift liability from drivers to manufacturers and lead to a drop in car ownership in favor of motor fleets, car-sharing and driverless taxis.

All of this means that auto insurance carriers have their work cut out for them to survive, according to the advisory firm. The time for insurers to act is now, KPMG said.

“Insurance companies will have to make important strategic and tactical changes sooner than anticipated to navigate through this turbulent transformation of the industry,” said Jerry Albright, principal in KPMG’s Actuarial and Insurance Risk practice.

In the meantime, these new business models will “bring about a decade or so of a ‘chaotic middle’ as insurers adjust their strategies and operations as autonomous vehicle technologies significantly deplete the need for personal auto insurance.”

Insurance companies vary in their level of preparedness for this disruption but many have taken only limited action to face this challenge, according to Joe Schneider, managing director at KPMG Corporate Finance. “As a result, auto insurers may choose to branch out into home-related products, or other commercial coverage, to benefit from diversification,” he advised.

The auto insurance industry is further disrupted by the surge of “smart money” generated by a variety of sources including venture capital firms. “The infusion of capital is boosting the development of autonomous capabilities and related business models, thereby accelerating the pace at which highly automated vehicles will hit the market,” added Schneider.

KPMG sees wide acceptance of autonomous driving, despite recent reports that humans may be reluctant to turn over control to robots. An American Automobile Association survey found that more than three-quarters of Americans are afraid to ride in a self-driving car. A J.D. Power study showed almost every generation is fearful.

Also ride-sharing giant Uber had hoped to disrupt the trucking industry with self-driving trucks and smartphone-based logistics services but progress has been slow.



John McCain: GOP health care bill likely ‘dead’

Sen. John McCain, R-Ariz., said Sunday the Republican bill to repeal and replace Obamacare is “probably going to be dead.”

“My view is that it’s probably going to be dead,” he said on CBS’s Face the Nation.

Support for the bill has been eroding over the July 4th recess, and McCain said he believes Republicans should work with Democrats to craft health care legislation.

That is a possibility floated last week by Senate Majority Leader Mitch McConnell, who said “No action is not an alternative.”

Sen. Ted Cruz on Sunday reiterated a push to simply repeal Obamacare, let it go into effect in a year or two and use that time to debate replacement.

“I continue to believe we can get this done,” he said, also on Face the Nation.

Republicans need at least 51 votes to pass their repeal and replace proposal, and haven’t been able to get there.

Sen. Lindsey Graham, R-S.C., said Sunday that he would support it, saying “I think this bill is better than Obamacare.”

“Whether or not we can come together I don’t know,” Graham said on NBC’s Meet the Press. “Mitch is trying. I would support the proposal before us, but you’ve got different camps in the Republican Party.”

Graham said with insurers dropping out of exchanges and premiums soaring, the failure of Obamacare is inevitable.

“My advice is if it does fail, work together in a bipartisan fashion to replace it,” he said.



Insurance companies furious at levy for floods

Raising insurance tax to build more flood defences could set a dangerous new precedent and pave the way for future taxpayer rebellions, according to insurance firms.

The chancellor said the £900 million raised from a hike in insurance premium tax would be used to build 1500 new flood defences.

But charging insurance customers to fund infrastructure spending was slammed by the industry.

Linking tax rises to specific spending is rare because taxpayers never normally know how money is spent.

The ring-fencing tactic has been frowned upon by previous governments but George Osborne has made this a mark of his tenure, including yesterday’s sugar tax, which will fund schools sports.

Cormac Marum, from Harwood Hutton, warned the move paves the way for “conscientious objectors”, who rebel against certain taxes. “More people will justify not paying a certain tax on moral grounds. You can’t have people having a menu of taxes to pick and choose from,” he said.

The 0.5% increase set off alarm bells in the industry.

The AA criticised it for unfairly burdening motorists. “Using it for flood defences is helpful but it simply replaces past spending cuts.



Competition watchdog to examine warranties for new homes

The Competition and Markets Authority is examining payments between housebuilders and the providers of warranties for new homes as part of a review of NHBC, the largest warranty provider.

The CMA announced last month it was reviewing undertakings made by NHBC, the standard-setting body for new-build properties in the UK and the main warranty provider. These 22-year-old undertakings were designed to improve competition in the warranty market.

The review was announced amid concerns that NHBC is compromising its independence by paying millions of pounds to developers every year. However, the CMA said it was launching the review following a request from NHBC and that it would not consider the “wider issues” relating to the organisation.

Nonetheless, the CMA has sent a substantial list of questions about warranties to leading figures in the sector as part of its review. The questions, which have been seen by the Guardian, include asking warranty providers whether they have loyalty or low-claim schemes that compensate builders with a low claim rate and how these payments are calculated.

The Guardian revealed this year that NHBC is paying around £10m to £15m every year to housebuilders through what is effectively a profit-share agreement. Campaigners said these payments called into question NHBC’s independence from housebuilders. In response, NHBC said the payments were a “very small” proportion of its annual turnover and that it was common practice in the insurance industry to recognise good claims history. NHBC said the payments, which it describes as premium refunds, totalled £4.5m last year.

NHBC, which claims to have an 80% share of the new-build market, sets quality standards for new homes and provides 10-year warranties to buyers. The warranty is a form of insurance that is supposed to compensate the consumer or fix faults in the new property if there are problems within the first 10 years.

However, there has been growing criticism of the quality of new homes in Britain and the lack of protection for consumers. Bovis, one of the UK’s largest housebuilders, was forced to pay out £7m to compensate customers who bought poorly built new homes, while Clarion Housing Group, the country’s largest housing association, has agreed to buy back properties in a London development.

A survey published by the House Builders Federation revealed that 98% of customers have reported snags or defects with their home since moving in a year ago, up from 93% last year.

Philip Waller, a retired construction manager who runs the campaign website, said: “The NHBC ‘premium rebates’ to plc housebuilders and the minimum claim value [for new home buyers], which is currently £1,550, are two areas I believe that require examination and investigation.

“I also feel that the historic claims data collected by the NHBC relating to specific individual housebuilders should be made publicly available enabling consumers to make a better-informed buying decision.”

The undertakings made by NHBC were that it allowed housebuilders on its register to use other warranty providers and that it did not make changes to its rules that could hurt competition without approval from competition authorities. These are now being reviewed.

The CMA declined to comment about the questions sent as part of the review.

The NHBC said: “There have been significant changes in the new home structural warranty market over the last 20 years and NHBC’s view is that its undertakings are now obsolete. So, when approached by the CMA, we welcomed the opportunity to work with them and we asked for the undertakings to be reviewed and released. This reflects our commitment to maintaining an open and competitive market for new home structural warranties.

“The CMA’s review will look at how the market for new home structural warranties currently operates to protect homebuyers in order to see if there has been a change in circumstances which would justify the removal or variation of the undertakings. The CMA has expressly stated that it will not be considering wider issues relating to NHBC as part of this review.”

 This article was amended on 12 April 2017. The word “investigation” was changed to “review” in the first sentence of the fourth paragraph and an additional sentence was added to the end of the fifth paragraph.