Fairer insurance law for consumers?

Annisele

raskazz wrote: »

The FSA/FOS works pretty well on these issues for retail customers as things are.

I think you're pretty much right - but the FOS can't always make a binding award for the whole of a retail customer's losses.

It's not impossible that a retail customer could have an insurance claim that exceeds £100k, and FOS awards are only binding up to £100k (excluding interests and costs). I know the £100k limit is an entirely different issue, but I think it does have a bearing on this one.

Edit: Selden types more quickly than me!

sugared_honey

I think there has to be a fair balance here, so often, we come across policies where the policyholder has 5+ undisclosed claims on previous policies, had they been disclosed, we would not have offered cover.
I used to sell insurance, was always very thorough over the 'previous claims question', when one of my customers tried to make a claim later in the year, their policy was declared void due to non-disclosures. When I asked them why they had not disclosed this when we discussed it, they replied 'we thought it wasn't relevant'.
IMO 'have you, or anyone else in your home made ANY household claims in the last 5 years' couldn't be any clearer. Surely its just common sense, that if you're unsure if something needs disclosing or not-just disclose it.
I have however come across many incidents where someone has forgotten about an accidental damage claim, or similar, from 4 and a half years ago-understandable and not normally a drama.
Not sure people should need babysitting, just because they're using the internet to apply for insurance.

Rant over!

raskazz

Selden wrote: »

How effective is the FOS at giving you a binding award over £100,000?

That can be changed very easily without the need for new statutory instruments. Can you even provide any examples of an insurer acting contrary to the FOS's advisory recommendations in cases involving amounts over £100,000?

Selden wrote: »

If insurers - encouraged by the FSA/FOS - are already meeting these standards, what expense or administrative burden?

Read the 200 page report and draft bill on the site that you linked to. Insurers would no doubt have to plunge resources into compliance and training which could be avoided if a less revolutionary and more reasonable approach was taken - i.e. revising regulatory powers of the FSA/FOS. No doubt this whole palaver is keeping plenty of civil servants and lawyers in jobs.

Annisele

raskazz wrote: »

Can you even provide any examples of an insurer acting contrary to the FOS's advisory recommendations in cases involving amounts over £100,000?

I can't find any examples of insurers not paying (which doesn't mean there aren't any!), but I can find a couple of examples of other firms not paying - and they went to court and got a declaration that they didn't have to pay.

I don't want to turn Selden's thread into an argument about whether the £100k limit should exist, but the fact remains that it does - and I don't think it's fair to have a situation where consumers could potentially be treated very differently depending on the size of their claim.

mikey72

Steve1981 wrote: »

"Have you or any driver on the policy had any accidents, claims or glass damage during the last 3 years?"

I can honestly say I have never seen, or been asked that question in all my years of buying insurance.

It's always seperated for each driver, and has never included windscreens as a specific item.

In fact every insurance I have implied that windscreens are not included as accidents or claims, as they don't affect the no claims bonus.
If the insurer still gives a no claims bonus at the end of the year, from a logical point of view, there can't have been a claim, and they have issued proof of it.

The websites have never stated a windscreen is a claim, so I think I agree with the op, yes, more tighter rules are needed.

foggytown

IMHO it has to be said that the domestic insurance industry and the media have been substantially responsible for the public's distrustful attitude towards insurers. BBC’s “Watchdog” and rags like “The Sun” are constantly braying about David v Goliath stories where consumers have been trampled by their own insurers. (Just recently (IIRC) a woman’s legitimate medical claim was rejected because she hadn’t disclosed that she’d had her ear syringed some time prior.)

The industry’s cat fight for market share has resulted in more cut corners than a snowflake. The on-line DIY sites have tried to condense the proposal stage into an impersonal tick-the-box exercise. By doing so, they have had to ask some pretty outrageous questions just to try to cover themselves. (From an Axa proposal: “Have you or anyone living with you suffered any household losses or made any claims in the last six years?” So - not only do you have to remember claims you may have made, you also now have to remember incidents you could have claimed for, but didn’t!) In addition, the relentless banging on of comparison sites makes policy-hopping an annual obligatory event.

The insurance industry is incapable of self-regulation and the powers of the FOS are sometimes toothless, ambiguous or ill-defined. I would favour expansion of the current insurance laws which would prevent insurers from pouncing on innocent or unintentional non-disclosure as a claim-avoidance tactic, but also treat intentional non-disclosure with the severity it deserves. Reasonable, independent minds can always distinguish between the two.

magpiecottage

Selden wrote: »

That case is Bunney v Burns Anderson and Cahill v Timothy James.

And whilst the defendants were IFAs, would anyone care to guess who is in reality likely to have been defending the case?

These were not claims against insurers but seeking redress for defective advice. The IFAs' Professional Indemnity Insurers defended claims just as your car insurers will defend claims from third parties where possible.

If FOS overturns a decision by an insurer to decline a claim it will generally be paid in full because the insurer has the resource to meet it.

dunstonh

Little changes. The Financial Ombudsman Service published details of a not dissimilar case back in 2003.

So a good number of years before the FOS guidance on non disclosure was published and the ABI acceptance of that.