Bankruptcy and Insurance

4$£&*(£$&*(!

Heycock wrote: »

There is some serious defensive misquoting going on here. I said "many" not most. If you doubt this, why is it that loss adjustors always do a credit check on claimants? When a struggling pub burns down why do the police run a credit check on the owners. I'm not defending their actions. Merely stating what they do. Don't shoot the messenger. Yes...the numbers of criminal bankruptcies are few in terms of total insolvencies but it is the bad apples which give everyone a bad name.
"Insurance companies are bedevilled by fraudulent claims". Fact. Why do you think your premiums are so high.

I think the problem here is that I am merely playing devils advocate in response to OP. I am NOT saying the insurance companies are right in their assumptions...I am simply telling you, as someone who worked in insurance WHY they make those assumptions.
My last comment concerning bankrupts of whom i am one, is that the reason a significantly large number of people go bankrupt is through having multiple credit card debt. How did they get all that credit? By being 100% honest on ALL their credit applications? If you KNOW you can never pay off your debts but continue borrowing then that COULD be construed as fraud.
Who is more likely to put in a false claim for £300 worth of defrosted freezer contents? The man with money in the bank or the man with an IVA he can't honour , the bailiffs knocking at the door and no bread on the table?

This is the insurers rationale. NOT mine.

And ultimately it's the insurer who calls the shots...not us.

It's not personal ...its business. And as I said, but some of don't want to admit it, insurance is a gambling business. Are you a greater risk than the next man. Yes or No. That's the way insurance has always run its affairs..that will never change.

You've said that many bankrupts have been associated with fraud. That's a massive statement to make. Let's see some evidence to support that. I could equally make such a bizarre comment for instance that almost all car accidents are caused by adults, and hardly any by children, so let's ban adults from driving as surely children would be safer drivers? It just doesn't make sense and you haven't anything to support that other than your own prejudices.

Insurers will pile on risk factors to drive up premiums and increase revenue. Last year I asked over 50 insurers to provide evidence to me that bankruptcy affects risk and not one of them has.

You've really made some poor statements generally and you appear to be back-pedalling so fast now it's untrue. It doesn't wash with me whether you are an ex bankrupt or not - you've made some huge generalisations that are upsetting, unfounded, and I should imagine have angered a lot of other FM's here.

Heycock

OK I give up. I agree. You're 100% right. Nobody takes on credit they can't afford to repay. There is no culpability on the part of bankrupts. We are ALL innocent victims of rapacious bankers and have no responsibility. When i took out my loans I had a gun to my head. It's all the banks fault that I accidentally gave the wrong figures for my income.
Insurance companies are charities and should offer cover regardless of what their actuaries are telling them. Actuaries are innumerate idiots and have an understanding of statistical probability below that of the average betting shop loser.
The police are plain wrong to suspect an arson victim might have set fire to his own property to pay off his debts. It just wouldn't happen would it?
There is no such concept as criminal bankruptcy. Everyone gets automatic one year discharge. Everyone's bankruptcy finishes after 3 years. The OR always gets 100% cooperation.
There are no bad fish in the barrel. We are ALL innocent.

In the end it doesn't matter what i think or what You think. The insurers...it's their money. It's up to them how they gamble it.
The OP wanred an answer to a frequently asked question. You might not like the answer BUT DON'T SHOOT THE MESSENGER.

4$£&*(£$&*(!

Heycock wrote: »

You might not like the answer BUT DON'T SHOOT THE MESSENGER.

You are not a messenger, you are someone with a prejudice and no evidence to support your upsetting and unsubstantiated statements.

alastairq

Actuaries are also subject to the sorts of prejudices we see so often on this forum....human nature, I suppose?


What you suggest is that the actuaries actually lump every person who has been bankrupt in the same group as the failed Publican?

What you do suggest is that the Actuaries are somewhat bigoted in their interpretation of the statistics.

I believe the fact of the matter lies with the simple truth that insurance companies know they have a captive market.

And therefore seek to exploit that captive market in any way possible.

Everybody needs insurance....for buildings, for contents, for vehicles, whatever.

Not by choice, but simply because we are compelled to have it, by mortgagors, by law, and in the expectation our Society lays upon us. [we are living in a litigious world?}

Yet the reality is, there are very very few actual insurance companies out there.......despite what Gocompare would have you believe.

Those insurers can afford to discriminate against provable minorities [like, BRs?]

Heck....I have all the essential insurances....but over the years, I have made one big, big mistake with them all...........I haven't made a claim!

If what you said earlier is so right, then it's about time I started claiming....for everything I can think of...[and probably, a few I cannot think of?}

because my insurers sure as hell are expecting me to.

debtinfo

City slicker, i think you are being unfair to Heycock as they are simply pointing out the reasons that insurance companies feel the need to act in the way they do which was what the OP asked. It is true that many bankrupts have not been 100% truthfull in their pre bankruptcy dealings. I cant give you any figures and you may choose not to believe me and we are not in any way saying that the majority do but some do.Im sure that people who are not bankrupt do as well but perhaps its the fact that when you are made bankrupt investigations take place and wrongdoing tends to come to light, hence when you do go bankrupt you get lumped in with the group that has wrongdoing proven rather than with the non bankrupts who are probably doing it as well but largly goes undetected.

It is also not right to simply reduce the number of wrong doers to those with BRO's as from my personal experience i know that there is much low level wrong doing that never attains the merit of a BRO, much more so in fact.

Unfortunately that is the way insurance works , just as you get grouped in other ways based on your age and sex not on your actual proven driving ability.

Personally i dont think insurance should take account of bankruptcy i think that should be restricted to transactions that involve a reasonably large amount of credit but that is the system that we have

Heycock

thanks debtinfo.
Alistairq...post #13 Sarcasm. 100%
Cityslicker .No I'm not backpedalling at all. Reread all my posts. I, unlike you, have taken this very subject up a along time ago with an actuary friend from my old days. I myself have argued with her that it is unfair to tar all BRs with the same brush. But her response is that insurers are simply making commercial decisions based on THEIR perception of statistics. Not mine, not yours. THEIR. How clearer can I spell this out. If I say that Hitler had jews murdered because he hated jews, is my statement of his motivation evidence of MY support for his stance. Do you not understand the difference between describing someones motivations and endorsing them? Your stance is that BR's are angels. My stance is many aren't. What do you understand as many? My understanding of "many" is "enough" to colour insurer's decisions. That is, too many.

Most BR's are honest and wouldn't deliberately commit fraud but it only takes a few (or many depending on your idea of what "many" means) to make it bad for the majority. If 3 out of 100 vicars have committed fraud but 5 out of 100 BRs have, who is the best bet for insurance? No i don't have figures to back that up before you ask. It's a hypothesis. Heard of that word?

I am no defender of the men in suits, believe me...I've fought them most of my adult life because having been one I know how they think. And sadly they don't like us. Having a go at me for stating that truth isn't going to change it

Heycock

Here's a few words to ponder while you throw brickbats in my direction. Those of you who have any experience in finance, mortgage broking or insurance will immediately get my drift.

Sub-prime lending.
Self-Certification.

I was personally involved both as a consumer and provider. One mortgage/insurance adviser doing 2 or 3 loan deals a week in one office of 100 advisers with 50 offices in the UK. That's just one company of 100s in the lending/mortgage/insurance business. How many self certified customers does that make? Is it "many"? Most self-certifiers I dealt with simply declared the income level required to get the mortgage or loan they wanted. Strange coincidence don't you think. Alternatively if you believe in the goodness of men, perhaps they were honestly matching their requested loan amount with their true income. No checks ever made. Self cert...that was the point.

Rather than bandy the word "many" again because it upsets some people, what I will say is that a "considerable", even "significant" number of those self-certifiers ended up having their day in the county court. Including a "generous" number of the advisers who all being self-employed had no other way of proving income.

If you don't want to call that fraud, then that's fine by me. OK?

And to finally finish. Before my insurance/mortgage days, I worked for Experian for 4 years. Credit checking. Customer profiling etc etc. I'm not a complete muppet. If I offer an opinion it's informed. Cassandra had the same problem. Never heard of her? She spoke the truth and noone believed her.

[Deleted User]

Thanks Heycock.

As you've said, serious defensive misquoting and misunderstandings on this thread.

Pity.

alastairq

Alistairq...post #13 Sarcasm. 100%

I know that!

You know that!

But for every one of us there are a dozen lurkers reading....some of whom will be quite 'sensitive' to what is posted...and some may not see or understand the sarcasm.


If I can use a non-BR-sensitive topic as an example.... Marriage?

What really is the point in Marriage, if.........one approaches the idea with the view that more than half of marriages end in divorce?

Why bother in the first place?

Why set yourself up for the immense hassle of property division?

Why bring children into the world if all you will probably do is subject them to the vicissitudes of a divided family, upheaval..[and probably parental BR??]

Yet, marriage thrives [to an extent]....we do it for one simple reason...it seems like a good idea at the time.

It's the same when taking out credit.

For sure, some people
will access credit with fraudulent intent.

Just like some people will enter marriage agreements for purposes other than love and family [nationality, passports, visa's, or estates, for example?]


For someone reading the tone of your posts, there appears to be an attack on the very morality of bankruptcy?

I well believe what your experience has shown you is, the excuses of the insurance industry.

Excuses presented under the umbrella of credibility of actuaries, for example.

alastairq

Sub-prime lending.
Self-Certification.

Entered into by the Finance Industry simply because all the other market sectors were saturated.

In other words, the prime motivation was profit....at any cost.

Right down to the Sales team levels, where doubtless the bonus incentives were openly encouraged?

SO, if a potential customer was encouraged to be economical with the truth....where is the Fraud?

Especially as it wasn't discouraged, by the Sales individual?

Did the Sales person actually care whether the product they were going to get a signature on, was actually appropriate, or affordable?

No, they did not! They were protected by their working terms and conditions from the downside of that eventual sales failure.

Self-certification was a tool created by the Finance industry, to overcome the one problem with selling more and more financial products....and that was, identifying the real affordability of the credit sought.

So,no fraud in the least.......simply because, by it's very concept, there was no intention by the Finance industry to identify ability to pay.

Unlike when I took out my first mortgage, back in the 1970's?

Where the Mortgagor had the strictest rules concerning matching the loan to ability-to-pay.

Fraud? Moral responsibility?

Inconvenient for all at the time.