Have you ever been hesitant to tell your car insurer about minor damage to your car because you were afraid your rate would go up? The Insurance Information Institute reports that the average expenditure for car insurance has steadily increased each year since 1999. If no other party is involved, you may be tempted to keep quiet about a minor claim. But why have insurance if you can’t use it when you need it?

“People are often too petrified to file a claim because they think they won’t be able to afford a premium increase,” says Eric Tyson, the author of “Personal Finance for Dummies.” We all want to be accident-free, but “it’s important to remember that filing an insurance claim isn’t necessarily bad,” he says. “Insurance is there to protect you, and it makes good financial sense to use it when necessary.”

* What to do after a car accident

The first part of the claims process is pretty straightforward.

“In an accident, an adjuster will be assigned, and, based on the specific factors of the claim, they may talk to you and they may work with the other driver involved. They also might look at police reports, take a look at your car and look at the car of the other individual involved in the accident,” says Mike Siemienas, a spokesman for Allstate in Northbrook, Ill. Then, the adjuster will work with you to ensure any necessary repairs are paid for and completed.

What happens after the claims process varies. If it is determined that you are at fault, your rates could go up or you could lose coverage altogether. Here are six things you need to know about car insurance both before and after you file a claim:

1. Know the difference between cancellation and nonrenewal.

There’s an important distinction between an insurance company choosing not to renew a policy versus canceling one. According to the Insurance Information Institute, a company can’t cancel a policy that’s been in force for more than 60 days unless one of the following has occurred:

* The premium has not been paid.

* The insured person fraudulently filled out the insurance application.

* The policyholder’s driver’s license has been revoked or suspended.

However, insurance companies can decide not to renew a policy once the existing term ends.

“Companies generally write policies that are renewed every six months or one year,” says Mike McCartin, an insurance agent with Joseph W. McCartin Insurance in College Park, Md. “If you have an accident where you are at fault, and you’ve had previous claims in the last three years, your insurer might decide not to renew your policy.”

That’s a general guideline, but McCartin says there are no firm rules about when a company can choose not to renew.

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In broad terms, franchising is a safer option than going into business on your own. A franchisee should have a tried and tested format to follow, training and support from their franchisor, and a network of fellow franchisees to speak to - so although franchisees own and operate their own business, they are not doing it alone. A good franchisor will encourage and help its franchisees with business planning, both at the outset and on an ongoing basis - helping the business to get off to a flying start and continue to develop.

Many small business owners are just too busy to look at what is happening in the marketplace, what competitors are up to and how customers needs might be changing - but a good franchisor will be looking at research and development, helping its network of franchisees to keep ahead of the game. All this support means that banks are going to be much happier to lend to a start-up franchisee. But before you are ready to talk to the bank about borrowing money to start your franchise, you need to establish how much funding you will need.

There are a number of costs which need to be taken into account, depending on the type of franchise - the initial franchise fee is really only part of the picture. For instance, an owner/operator franchisee may need to purchase or lease a liveried van and they will need to fund opening stock, while a retail franchisee will incur the cost of leasing premises and any refurbishment requirements as well as shop front, branding, fixtures and fittings. Franchisees also need to think about professional charges related to the property transaction, such as lawyer’s, architect’s and surveyor’s fees, as well as insurance. If employing staff, there may be recruitment costs, for instance the franchisee may need to provide uniforms. There will also be marketing costs involved with an official launch of the business.

Working capital will be required - this is what you will need to live on prior to the business generating cash flow and profits. Find out whether training costs are included in the initial franchise fee, if not, these will have also to be factored in.

Once up and running, you will pay the franchisor ongoing management services fees - these may be a percentage of your turnover, a mark-up on products provided or a fixed monthly or weekly fee. You should do your homework, and fully research what you will be getting for your money both at the outset and once your business is established.

For an established franchise, most of the major banks will lend up to 70 per cent of the start-up costs, for new franchises the figure will probably be around 50 per cent to 60 per cent. You will pay the borrowed money back over a period, maybe three or five years, depending on circumstances. The first step is to establish how much money you can invest in the business. What can you afford? Have you got savings and can your family help? Then prepare a full list of your personal expenditure: mortgage, hire purchase, household bills, and so on. This will show how much money you will need to take out of the business in order to live.

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Riding high on the Indian growth story, private equity investments in the country have crossed $2 billion during July alone and can touch $15 billion by the end of this year, a study by global consultancy firm PricewaterhouseCoopers said today.

The surge in PE investments is the result of huge returns of over 25-30 per cent which Indian firms provide to investors. “This by far exceeds any other market in the developed countries,” PwC Executive Director Sanjeev Krishan said.

Of the total, 55-60 per cent investments are made by overseas PE firms, he said, added that “for the year ahead, leading PE firms such as ChrysCapital and Henderson Equity Partners have several deals in the pipeline”.

Though some concerns have been raised by the PE firms regarding valuations, the sequential growth witnessed by the Indian economy has made them stay interested, the PwC report on ‘M&A in the first half of 2007 in India’ said. Going ahead, these PE funds are expected to favour consumers in retail, power equipment, healthcare, entertainment, media and the banking and financial services sectors, the report said.

Private equity investments have been rising steadily with over 200 deals worth over $ 6 billion during the first half of this year, compared to $7.9 billion in the whole of 2006.

There has also been a shift in sector focus by private equity funds with industries such as real estate, banking and financial services and media and entertainment witnessing tremendous growth in investment vis-a-vis traditional sectors such as IT, ITeS, pharmaceuticals, healthcare and telecom, the report added.

Investment in banking and financial services accounted for over 20 per cent of total private equity investment in the first half this year compared to just 7-8 per cent in 2005 and 2006.

Some significant private equity deals during the first six months of 2007 include Carlyle Group and Citigroup Inc’s investment of 786 million dollars for a 7.11 per cent stake in Housing Development Finance Corporation Limited.

NYSE Group Inc, Goldman Sachs Group Inc, General Atlantic LLC and Softbank Asian Infrastructure Fund invested about 500 million dollars in National Stock Exchange for a 20 per cent stake.

Deutsche Bourse and Singapore Stock Exchange picked up a 5 per cent stake in Bombay Stock Exchange for $42.7 million each.

In one of the largest FDI deals in Indian realty, Morgan Stanley invested $152 million in realtor Oberoi Constructions for a 10.75 per cent stake.

According to another global consulting firm, Grant Thornton, the total number of announced private equity deals stands at 30 worth $2.79 billion during July this year as against 36 with a value of $1.81 billion in June.

Foreign direct investment in India have jumped 75 per cent to $19 billion in 2006-07 from $11 billion of in-bound investments in 2005-06. The ministry of commerce and industry expects FDI flows in the current fiscal to touch $30 billion dollars.

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The past five years were heady times for financial services companies as they lent money out at low interest rates to home buyers and corporations alike and watched profits soar.

Bank stocks climbed as the firms cashed in on a booming housing market. Strong merger activity, led by private equity firms borrowing money to finance deals, also boosted demand for loans.

But when it became apparent a few months ago that many banks handed out too much money too easily and that some borrowers weren’t able to pay back their loans, the market panicked.

Companies like Countrywide (Charts, Fortune 500), a big mortgage lender that had lots of subprime borrowers — borrowers with less-than-perfect credit — were hit the hardest, but even those with less exposure to the subprime housing market weren’t spared by the sell-off.

And now, the market is worried that the corporate debt market could also be heading into trouble, fueling further fears of a looming banking crisis.

But is this already priced in the shares of many bank stocks? The recent panic may have created some great values for investors.

Investment banks tank……!

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HDFC Bank, the second largest private sector bank in the country, is gearing up to enter the investment banking business. The bank has applied to the Securities and Exchange Board of India (Sebi).

Recently, Credit Suisse received a merchant banking licence from the market regulator.

Among its peers, ICICI Bank, UTI Bank and State Bank of India are the major domestic players in the investment banking space. Even the top corporate houses such as the Tatas and Anil Ambani-promoted Reliance Capital have big plans in the investment banking space.

So far this year, the total crossborder deals in India stood at $44.3 billion, said a recent report by Thomson Financial.

The Hutchison Essar-Vodafone deal valued at $18.2 billion largely contributed to India’s active crossborder inbound activity. The business potential is huge and lucrative in this segment, hence, banks are rushing into this business.

HDFC Bank’s close competitor, ICICI Bank – with offices across 18 countries – has the highest market share in the $11.5 billion foreign currency loan market.

“We have drafted a business plan and applied to the Sebi seeking its approval to enter the merchant banking business. The business will be headed by an official from the corporate banking team. We have traditionally been active in working capital financing, now the bank will set up a project finance department and will be an active player in this space,’’ said a senior HDFC Bank executive.

“To complement the investment banking business, the bank will set up branches overseas. It has received RBI approval to set up branches in Bahrain, Hong Kong and London. We will now approach the local regulators in the respective geographies,’’ added the executive.

The bank, in a bid to give a push to its existing retail banking business, is in the process of setting up a non-banking finance company (NBFC).

“The NBFC will set up branches in locations where the bank is not present. Our strategy is to sanction smaller ticket size loans to the tune of Rs 25,000 through the NBFC outlets,’’ said the executive.

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There are many ways in which insurance professionals and insurance companies – both new and existing – can acquire business financing without using personal credit.

One method is called commission-based lending. Commission-based lending provides business loans to insurance professionals based on the value of their renewal commissions. Business loans of this nature can be used for a variety of things like office expansion, acquisitions, debt consolidation, and succession planning.

Another method is to leverage the value of future commissions as collateral for a loan. This way, there is no need to sell your book of business, or put up personal items as collateral against the loan. Some lenders will also allow you to consolidate personal debt previously acquired for the business.

An agency acquisition allows an agent to acquire a seller’s block of business as collateral for a loan. By going this route, the new buyer/owner can minimize the use of personal funds and maximize any working capital.

Regardless of which method of funding, agency owners need to put together a strong perpetuation plan. This plan should allow a seller to achieve goals of reaping a solid return on the years they invested in the business. The plan should also demonstrate how the new agent plans to achieve his or her business goals, and enable an already profitable agency to grow under new ownership. The startup price of the agency should be inline with the industry and should be reasonable for the buyer and seller if it is an acquisition. The plan should outline a few very important details: demonstrate how the agency will be financed; demonstrate how taxes will be minimized for the seller; details of funding of the buy-sell agreement; and, how control will be passed on to the successors.

For an insurance agency or agent to guarantee that their personal assets will not be considered when seeking business financing in the form of a commercial loan, they must be incorporated with the state and registered with Dun & Bradstreet for a DUNS number.

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