Brits 'unsure what insurance cover they have'

While consumers in the UK typically spend £1,500 on insurance premiums every year, many do not know exactly what cover they have, a new study has found.

Research by Fool.co.uk showed that 39 per cent of people in the country have no idea about the details and levels of their insurance cover they currently possess.

While ten per cent said they believed insurance is a waste of money, the majority of consumers (60 per cent) think it is a price worth paying.

Overall, the research showed that home contents insurance is the most popular in the country - with 89 per cent opting to take out a policy. Motor (85 per cent) and building insurance (85 per cent) were also common.

David Kuo, head of personal finance at Fool.co.uk, commented: "The key to buying insurance is only to insure against risk that you cannot afford to bear.

"So, if you buy insurance you don't need then you are wasting money. But if you don't buy insurance that you do need, then eventually your decision will come back to haunt you.

"Not knowing how much insurance cover you have is just as bad. It's tantamount to playing a card game where everyone can see your cards except you."

Recently, Equifax suggested that many people were still not considering ID theft insurance, as they were yet to be affected by any form of identity fraud.

Housing aid bills face vetoes by President Bush

WASHINGTON — Strapped homeowners could refinance into government-backed mortgages and states would get money to deal with foreclosed property under Democrats’ housing aid plan.

The measures, slated for votes Thursday, constitute the most significant action Congress has taken to date to address the housing crisis that’s at the center of the nation’s economic woes.

President Bush has threatened to veto both measures, which he says reward lenders and speculators. Democrats counter that the bills will head off hundreds of thousands of foreclosures, stabilize the shaky housing market, and prevent neighborhood blight.

The centerpiece of their plan is a bill by Rep. Barney Frank, D-Mass., the House Financial Services Committee chairman, to have the Federal Housing Administration relax its standards and back up to $300 billion in more affordable, fixed-rate loans for borrowers currently too financially strapped to qualify.

Those homeowners could refinance into new loans if their lenders agreed to take substantial losses on the original mortgages. Borrowers would have to show they could afford to make payments on the new loans. They would have to share with FHA at least half of their proceeds if they profited from selling or refinancing again.

The plan is projected to help roughly 500,000 borrowers at a cost of $2.7 billion over the next five years.

A separate bill by Rep. Maxine Waters, D-Calif., would send $15 billion in loans and grants to states for the purchase and rehabilitation of foreclosed properties. Proponents say it will prevent blight in neighborhoods plagued by abandoned, foreclosed homes.

But Republican critics argue it rewards lenders and investors who own the property, and could act as an incentive for them to foreclose rather than find ways to help struggling borrowers stay in their homes.

Democrats, seeking Republican support for their housing package, were planning to attach a grab-bag of measures Bush has called for.

Those include legislation to overhaul the FHA, to more tightly regulate government-sponsored mortgage giants Fannie Mae and Freddie Mac, and authority for state and local housing finance agencies to use tax-exempt bonds to refinance distressed subprime mortgages.

The plan is also to include a housing tax credit of up to $7,500 for first-time home-buyers, to be paid back over 15 years. It would permanently raise the limit on the size of loans FHA could insure and Fannie Mae and Freddie Mac could buy to $729,750 in the highest-cost housing markets. Those caps are scheduled to fall at the end of the year, to $362,790 for the FHA, and to $417,000 for Fannie Mae and Freddie Mac.

Faced with costly rebuilding, half of residents have left

Roy Wenzl, McClatchy Newspapers

GREENSBURG, Kan. – After this town was destroyed by a tornado a year ago, most of the 59 wounded made it to the hospital, which was also damaged.

Physician assistant Chris Gardiner, who lived in a home that he'd bought for $75,000, was the hero of the day, creatively treating those who were seriously wounded.

Mr. Gardiner, like most of the about 1,300 residents, vowed to stay and rebuild.

But like about half of the residents, he is leaving.

Even though the town has received millions of dollars in federal and state aid, along with help from many charities, it's not enough.

They bought their houses for $30,000 to $80,000 and found that to rebuild them would cost $100,000 to $200,000. They left, even though FEMA, the Federal Emergency Management Agency, provided $69 million in aid, and insurance companies paid $153 million in claims.

Mr. Gardiner learned that his house would cost more than $200,000 to rebuild. "There were agonizing conversations with my family."

He planned to shake President Bush's hand Sunday following his daughter's high school graduation, then move to Hutchison, Kan., where he's found a job and a house that he can afford.

Still, the half who have remained are optimistic. They've decided to rebuild as a "green" city, hoping to lure environmentally friendly businesses.

"Let's be sure about one thing," said Chuck Banks, state director of the U.S. Department of Agriculture Rural Development Community Self Help Housing program.

"Greensburg will survive, in part because the town leadership is strong, vital and impassioned. Greensburg will come back. Maybe smaller, but there is real vision and leadership among those people."

Roy Wenzl,

McClatchy Newspapers

Selby offers salvation to first time buyers priced out of York

Would-be first time home owners priced out of the market in York are beating a path to a new low-cost housing venture just 30 minutes away in Selby. They've found that by moving outside the city, but still within travelling distance of their favourite haunts, they can save up to £50,000 on the cost of a one-bedroom property and potentially more on a two-bedroom home.

Their salvation has come in the shape of Redrow's price-busting Debut @ Selby development, which features brand new one and two-bedroom homes from less than £60,000.*

One young couple who attended a special first time buyer event organised by Redrow were stunned to find they could buy a brand new home in Selby at little over half the price of a parking garage that was being advertised for sale in York city centre.

Richard Sunley, 22, who was looking for a first home with his partner Claire, says: "Originally we were looking for a home in York, which was only leading to disappointment. Everything was so expensive and the final straw came when we saw a garage advertised for £150,000. It was then that we decided to move our search out of York to see what else was available.

"Selby is more than manageable and hopefully it will give us a jump start onto the property ladder"

Redrow's Debut development, on Holme Lane, Selby, features 123 properties ranging from practical one-bedroom studios to spacious two-bedroom duplex apartments - all promising the concept of affordable, yet comfortable living.

Current prices are from £56,500* for a one-bedroom ‘D1' studio up to £99,500** for a two-storey ‘D4' design with two double bedrooms and bathroom at entry level and an open plan living, dining and kitchen area above. All of the properties fall well below the stamp duty threshold - another big plus for first time buyers.

Giselle Ledgard, area sales manager for Redrow Homes (Yorkshire) says: "According to the latest statistics, the number of first time buyers entering the property market is currently at its lowest since 1980.

"Our special event at Selby certainly brought lots of interest from people who just can't afford to get onto the property ladder in York itself. Indeed, our own research has shown that a typical one-bedroom flat in the city now costs £109,950.

"Many would-be home owners are waking up to the fact that it's possible to get from Selby to York by train in around half-an-hour and the town itself has a comprehensive range of shops, restaurants, pubs, night clubs and health facilities all on the doorstep or our development."

Redrow has put special measures in place to stop buy-to-let investors snapping up the Debut homes and purchasers are able to defer 15% of the initial purchase price for up to 10 years, which is another great saving.

Home owners also pay a single monthly service charge, which includes the gas, water and electricity bills, as well as buildings insurance, external maintenance - and even the cost of internal window cleaning - making it easier for novice home owners to manage their monthly outgoings.

Other first time buyers keen to get a foot on the property ladder can find out more by logging on to Redrow.co.uk.

General information about Debut, including video walk-throughs of some of the properties can be found at Debutbyredrow.co.uk.

* Price quoted of £56,500 includes Redrow Easi-buy assistance, full price is £66,999.

** Price quoted of £99,500 includes Redrow Easi-buy assistance, full price is £116,500.