Morality of Insurance Companies?

manrow

I am sure I am not alone in being very concerned at the growing list of exceptions and exclusions in the fine print of insurance policies.

I acknowledge that the companies must take steps to ensure that policyholders do not gain from claiming under a policy, but surely the basic premise is that companies were paid to cover risks which on average would result in their making profits if they had pitched the premiums about right.

Now they seem to be putting so many exclusions in place that they can assume they will be able to assume all premium income is profit?

There is one case featuring in the media currently where an insurance company refused to pay out to a student inured in a scooter accident on holiday in the Far East, because he did not hold a full licence; I presume he only had a provisional licence but what does that have to do with the legitimacy of the claim?

I know of friends and relatives who work for insurance companies, and they are paid bonuses based upon the number or scale of claims they can reduce or refuse to pay out for.

Isn't it about time that Martin Lewis and his merry band looked at and recommended insurance companies who were employing business and claims tactics in line with their original predecessors centuries ago such that they covered almost every risk as long as the bottom line showed a profit on average over years of trading?

FlameCloud

manrow wrote: »

I know of friends and relatives who work for insurance companies, and they are paid bonuses based upon the number or scale of claims they can reduce or refuse to pay out for.

Whilst I would love that to be true, it isnt- at least in any company I've heard of or worked for. I save my current employers around £80,000 a week in catching out fraudulent claims- mostly because I now mainly concentrate on the big complicated stuff. We do of course get a yearly bonus, but this is exactly the same % as any other department in the company.

People are getting more and more sophisiticated about making bent claims and with such competition in premiums there has to be some give. I would say that policies now actually say what the insurance company wants them to say- before they meant to say one thing but said another. This has tightened massivly IMO.

To give you one example of people and claims. We recieved a claim for £3000 worth of PB that an airline had lost. Nothing unusual. I asked him for proof of ownership and got receipts for everything- even socks and pants, all selotaped in neat lines to several sheets of A4. I didnt like this at all- I mean this in itself is unusual. He hadnt been on cover long so I spoke with several contacts at other insurance companies and what we found out shocked me.

This bloke was on benefits and recieving DWP payments- we could see that from his bank account. However, every month he put in a seperate claim for loss of luggage with different travel companies. You could see it from the payments on his account- every month a payment from an insurer. This bloke new the systems and was playing them. In total we found over £300,000 worth of lost luggage over the last 5 years (thats 56 flights, each losing luggage on!)- as well as a single payment of £250,000 for an accident (which I am convinced was bent). As a result, he'll be getting 3 letters from the 3 biggest insurers in the country inviting him to pay back the money he has gained from the claims- no doubt he'll be moaning to his mates about how immoral insurers are after he has just stolen over half a million quid.

Yes, the wordings are far more strict now, but I would say that this is due to factors outside of the insurers control- such as the willingness of people to sue that has affected it more than a base desire for increased profit. Insurance works on the law of large numbers, which pretty much equals out claims anyway.

dunstonh

I am sure I am not alone in being very concerned at the growing list of exceptions and exclusions in the fine print of insurance policies.

What do you expect with the ever increasing compensation culture that exists nowadays.

There is one case featuring in the media currently where an insurance company refused to pay out to a student inured in a scooter accident on holiday in the Far East, because he did not hold a full licence; I presume he only had a provisional licence but what does that have to do with the legitimacy of the claim?

We dont know the specifics so its hard to say but its probable that what he told the insurance company and what was fact were two different things. perhaps full vs provisional licence. Or perhaps they only covered people with a full licence.

know of friends and relatives who work for insurance companies, and they are paid bonuses based upon the number or scale of claims they can reduce or refuse to pay out for.

They will pay out on valid claims but given the increasing number of fraudulent claims and the general opinion by the public that its acceptable to commit insurance fraud then you should expect the insurance companies to protect themselves somewhat.

dave_behave

I can't speak for all insurers, and am personally shocked at how travel insurers like to deduct huge amounts from claims... but the company that i work for (Home Insurance) are not like the original poster mentioned at all.

When we receive a claim, we aim to settle it as soon as possible. There is no advantage in making it drag out and causing un-necessary problems to our customers.

Obviously we have a policy and exclusions, so the first thing we have to get right is that the event is covered. There are obviously grey areas.... but we aim to be as fair as we can and look at it from a customers perspective.

Of course we have to be aware of fraud, and the whole point of stopping fraud is to reduce the amount we pay out incorrectly.... and this obviously helps to keep premiums down.

Finally, our bonus is based upon the organisations performance... and nothing to do with how many claims we may pay or not.

One important thing... don't tarnish all insurance companies with the same brush!!!

Retired_I.F.A.

As a result, he'll be getting 3 letters from the 3 biggest insurers in the country inviting him to pay back the money

Why not phone the guy up and tell him to skip the country it's cheaper than a letter asnd he'd be tipped off far quicker.

dzug1

manrow wrote: »

There is one case featuring in the media currently where an insurance company refused to pay out to a student inured in a scooter accident on holiday in the Far East, because he did not hold a full licence; I presume he only had a provisional licence but what does that have to do with the legitimacy of the claim?

Everything - he was committing an offence by driving the thing without a licence.

For Indonesia you need an IDP and you cannot get one with a provisional licence - which are only valid in the UK anyway.

anna42hmr

dunstonh wrote: »

They will pay out on valid claims but given the increasing number of fraudulent claims and the general opinion by the public that its acceptable to commit insurance fraud then you should expect the insurance companies to protect themselves somewhat.

i agree, i too work for an ins co, in motor insurance, and what is beleived to be genuine is paid for, what isnt beleived to be genuine but are unable to prove again is covered, however there are many many cases that normal members of the public from all walks of life try and get that "little bit extra" covered, especially with accident claims,

for instance i have had several cases that people have tried to claim for x warning light or x fault with a car which miraculously appeared after a claim, however following some investigation by engineers who cannot see how this damage could be caused, and speak to dealers about the diagnosis, that it comes to light that they dealers have records of these issues on their computer records long before the claim, and i had 4 such cases last week alone! (many dealers retain records on vehicles when they carry out work/investigation, and in many cases can be accessed by other dealers in that chain)

we have no idea why the insurers declined the claim, however customers have the backing for the fos and if they feel that it has unjustly been thrown out, and the ombudsman agree, then the insurer is bound to the decision

so really is it the morality of the insurance company that should be bought into question, but rather than the morality of 1000's of people who try and de-fraud an insurance company just because they are a co-orporatiion that can so called afford it?

and at the end of the day the insurance company has its terms laid out in the policy booklet, and whilst i agree that they sometimes could be worded better, if customers knowingly breach that contract then the claim should be thrown out, and paying out on all claims, even one known to be either fraudlent or not within the terms of a policy would have an effect on all customers - pay outs would increase, therefore to balence this out premiums would increase eventually

thepearce

dzug1 wrote: »

Everything - he was committing an offence by driving the thing without a licence.

For Indonesia you need an IDP and you cannot get one with a provisional licence - which are only valid in the UK anyway.

It was Vietnam.
He has a full UK driving licence but not a full UK Class A motorcycle licence. Officially any class of UK or international driving licence would not apply in Vietnam and local moped and car users are required to have separate licences, although these laws are not strictly applied in practice.


http://news.bbc.co.uk/1/hi/business/7479520.stm

kittykitten

FlameCloud wrote: »

To give you one example of people and claims. We recieved a claim for £3000 worth of PB that an airline had lost. Nothing unusual. I asked him for proof of ownership and got receipts for everything- even socks and pants, all selotaped in neat lines to several sheets of A4. I didnt like this at all- I mean this in itself is unusual. He hadnt been on cover long so I spoke with several contacts at other insurance companies and what we found out shocked me.

This bloke was on benefits and recieving DWP payments- we could see that from his bank account. However, every month he put in a seperate claim for loss of luggage with different travel companies. You could see it from the payments on his account- every month a payment from an insurer. This bloke new the systems and was playing them. In total we found over £300,000 worth of lost luggage over the last 5 years (thats 56 flights, each losing luggage on!)- as well as a single payment of £250,000 for an accident (which I am convinced was bent). As a result, he'll be getting 3 letters from the 3 biggest insurers in the country inviting him to pay back the money he has gained from the claims- no doubt he'll be moaning to his mates about how immoral insurers are after he has just stolen over half a million quid.

Query: where on earth did he get all the receipts to make the claims?!

A_Nice_Englishman

kittykitten wrote: »

Query: where on earth did he get all the receipts to make the claims?!

Perhaps he bought the items, claimed for the 'loss' and sold them on? The resale price would be his profit from the fraud