Do we really need to insure against school closures?

A new ‘school closures insurance’ has been launched to ‘protect’ parents against financial loss when their kids are unexpectedly off school. Another barmy idea to add to the list of pointless insurance premiums?

If you’ve got school-aged children, chances are that you lost out financially due to the bad weather this winter. Taking unexpected time off work or arranging last-minute childcare can throw your finances off track – cue school closures insurance.

Yes, you heard me right. The next step in insurance products seems to be getting cover in case your child’s school unexpectedly closes. A new insurance policy from Towergate Insurance claims to be ‘the first of its type’ and costs £30 a year per child, paying out £100 a day when their school is closed due to snow, flooding or boiler failure.

As with most insurance, there are some catches. First, the school must be closed for more than a day before you can claim. Second, the annual payout is capped at £500, so there’s little profit to be made here.

Insurance companies cashing in

Catches aside, is this kind of product really necessary? To me it reeks of insurance companies cashing in on the fear that next winter might bring a snow chaos re-run. Yes, it’s inconvenient and could cost us a little money, but where will insurance stop if we insure against every possible inconvenience?

This isn’t the first time we’ve come across a pointless insurance product (and I doubt it’ll be the last). Our list of financial products to ditch today shows that insurance is often a waste of money. Three out of our top ten were insurance products – mobile phone insurance, ID fraud cover and PPI insurance. We’ll reserve a slot for school closures insurance next year!

Insuring against every possible problem isn’t a way to save money in the long-term. Better to put a little aside each month in case of a rainy day (or even a snowy one) than fork out endless annual amounts on barmy premiums like this.

richard says:

3 February 2011

Ummm

If I have to be off work because my child can’t go to school – I could lose far more than £100 day – in the north the number of days lost can be high. Have to add recent winters have been worse than usual.

If my child was say 14 then I wouldn’t bother – If they are 5 it would be useful.

JCDD says:

in the middle of the opening info Hannah writes: “……To me it reeks of insurance companies cashing in ……”
Absolutely Hannah – got it in one.

£30 per year per child. So if you are an “average” family with 2.4 kids then that’s £90 a year (OK, I know 2.4 x £30 isn’t 90, but you either have 2 kids – £60 – or 3 – £90, not a bit of a child.)

That means that if you are an average family you’ve lost £90 a year if the school stays open, and weather being weather that’s completely unpredictable.

On the other hand, if there is closure, as I understand it for ONE day of closure there is no pay out, so you are £90 PLUS your lost wages / childcare fees worse off.

Then if the school is closed MORE than 5 days you get a maximum of £500 anyway, so it’s likely that when you take £500, deduct the premium, deduct the first day’s wage loss or childcare fees, and then deduct the lost wages / childcare fees for the days from No. 6 onwards, you’ll probably not do much more than cover the cost of the premium (maybe not even that in weather like last December).

However, and I know I’ll get slated for this remark by millions of people, and probably have a “mumsnet” campaign launched against me, to my way of thinking anyone who pay’s this premium is asking to be ripped off anyway. I make this sweeping remark on the basis that in my (old fashioned) opinion, parents should EXPECT to have the odd day when they cannot go to work or when they have to pay childcare fees, for when their child is ill, when school is closed, etc. It’s my (unpopular I’m sure) opinion that if parents are so **** bent on their child(ren)’s schooling never affecting their own plans then actually they probably should have chosen between children or a career rather than tried to have both.

I do know, of course, that there are unfortunate (mainly single parent) families who simply don’t have that choice, and I work with a great many of those in one of the 3 most deprived post code districts in the country: but this insurance won’t help them – 99% of the single parent families (and a good number of the 2 parent ones) could not possibly afford the £30 premium to start with, so this won’t do any good to them at all.

No, I think Hannah’s right: this is a money spinning scheme by the insurers designed to bulk up their profits at a time when more and more people are claiming on insurance and / or finding that they can’t afford higher premium schemes any more.

rarrar says:

From what I hear on my local radio station, while closures for a day seem quite common in winter time here in the North West, more extended closures seem rare.
I note the small print specifies that the “whole school” must be closed , Senior schools often try to provide some minimal teaching for children about to take exams – so no cover here !
While adverse weather is covered – closure due to lack of staff isnt covered , this is the usual reason given for closure.
Some schools in more remote rural areas seem to close regularly every winter for a few days -I wonder whether the insurance company will decline insurance for these !

Dave Darwent says:

Sounds like a huge con to me!

I’d rate it alongside extended warranties on electrical goods.

But then, I lecture in a sixth form college that prides itself on NEVER closing (even in the snow last Dec we provided warmth, shelter and hot food and drink for any students that could get there, along with a library and computer suite where they could work, which we did on minimal staffing using local staff, on most of the days that everywhere else for miles around was completely shut) and I don’t have kids, so I guess I can’t really comment much.

Still, In my opinion, Hannah’s got it dead right.

Elaine says:

14 February 2011

Everyone’s situation is different and there’s always going to be individuals who don’t see the value in a product like this. Are there any working parents amongst them? Or are they individuals with opinions that don’t have children, or don’t work and are therefore unaffected by school closures?

Personally, as a single mother running my own business (in the North East I hasten to add), when the schools are forced to close, it’s an absolute nightmare and this insurance is a godsend. After all, someone has to look after the children when they are unable to go to school for whatever reason and that means if you are working, you either use some of your precious holiday entitlement, take it unpaid, or you have to pay someone else.You lose out whichever way. No-one likes paying out for insurance, but it provides most people with peace of mind and it’s one thing less to worry about when it snows!

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