The Great 'How do insurers decide whether to pay out?' Hunt

MSE_Martin

When you make an insurance claim, whether it's home, travel, health, illness or anything else, someone at the insurance company decides whether to pay it or not. Is it done on charts? Are there targets? How's it decided?

If you've worked in the industry why not dish the details to help MoneySavers?

Please post below to share your knowledge.

mattymoo

Dealt with motor and liability claims in the past.

Motor stuff is straightforward. We used to have claim forms but now most of it is over the phone. They are checking the details tally with the original proposal - amazing how many people forget what they have and haven't disclosed.

Providing the cover is there (comprehensive) then next step is to arrange repairs. Repair costs or write off value are normally agreed with the garage by a motor engineer - someone with 10 years + experience in the bodyshop sector and knows what they are talking about.

Liability claims are a different kettle of fish. You are being asked to compensate a third party, whether that is another motorist, employee or someone who bought a firms defective product. The liability to make the payment and the size of the payment are determined in English law. Of course, there are two sides to the story and 2 differing opinions but that is where the solictors and court processes come into play.

I worked for one of the larger firms and the numbers of claims and amounts paid out was pretty staggering. 100 staff, each dealing with 30-50 files per day in a regional office (one of 12 at that time). 4000 payments per day roughly.

I suspect Martin your question will have more of an impact on household insurance claims. Insurance is a contract and it is drafted so as not to be open ended - exposing insurers to pay out for things they never intended to cover. Many customers have a wide expectation of these policies and the true cover often falls short of this. Examples include things like poorly maintained roofs and damage caused by vermin.

Targets are only in place for workload handled. If your colleagues are handling 30-50 cases a day but you only handle 5, questions would be asked. On the other hand, those 5 could be very complex cases but the target system should take that into account. There were never any targets for declinatures or amounts saved when I handled claims - 1987-1994.

gazza975526570

Ive dealt with Home and motor claims for over 10 years. At the companies i have worked for the decision as to wether to provide indemnity is simply based on if the cover is actually in place. Not on targets or anything else.

If a decision is in a grey area or a sensitive matter it can definately go in your favour if you have been a loyal customer with few previous claims. They are more likely to go in your favour so it isnt always best to change each year. COst of your premiums can also affect judgement calls, ie higher premium more inclined to try to save their custom.

Targets are set for certain areas, ie fraud detection. This is becoming more and more apparent and insurers using more sensitive means to detect fraud. This i see as a good thing as why should mine (or anyones premiums be increased due to someone commiting fraud). In addition if a claim is exaggerated - ie claiming for £300 of freezer food lost when it was only £100 they will not only not pay out but this could affect your ability to insure your home in future.

My advise - be honest and open. If you have nothing to hide then dont keep something back - even if you think it sounds odd.

nickmatthews

Half my ceiling collapsed 2 years ago - I rang the insurance company, their builder turned up, walked in my lounge, looked at the ceiling (or what was left of it!) & said 'wear & tear mate, insurance won't cover that'. He then told me that if I'd poured some water thru the floorboards in the room above (as you could see them) that I'd probably have been able to make a claim. I spoke to the insurance company & they told me they wouldn't pay out.

I had been with them for approx 8 years & had never made a claim! I of course cancelled my policy & moved elsewhere

For the record it was Liverpool Victoria & I no longer recommend them!

Compensationitis

An insurance contract is not a maintainance agreement, you are insured for 'perils' which include fire, accident and theft among other things. If your ceiling falls down because someone did a lusy job of putting it then that is your problem I'm afraid. It is your responsibility to ensure that your possessions are in good order, that you take good care of them and don't do anything silly with them.

When you make a claim you should look at your insurance policy, does your house insurance include accidental damage? i.e. Foot through ceiling in attic. Stone thrown up by lawn mower etc. If you skimp a couple of quid on the cover then you must suffer the consequences of not being insured for what may seem (to you) the daftest thing. Some supermarket insurance policies are cheap because all sorts of things have been 'trimmed' off to fit the price and commission rate the retailer expects.

Better to pay an insurance broker to educate you than lose a packet because some fancy advertising convinced you to be a tight fisted fool.

Reaper

Years ago I worked for an insurance company. Word got around in the building trade that insurance claims at our company for under £500 went through without being checked. They promptly got a flood of claims for £499. I don't know whether it was ever true but certainly when I was there all such claims got investigated very carefully and few paid out.
So any advice you see here treat with caution as policies on claims do vary.

worto03

With my house insurance they have said that they will pay for the work as long as the quote is for less than £500 without sending an assessor out. This is due to storm damage.

My mate tried to claim for storm damage for something else but they checked his post code against a database and said that there were no storms in the area that week so woulnd't cover it.

So if your trying to get storm damage through make sure you wait for a storm, don't claim in the middle of a nice summer month.

worto.

fad1211

nickmatthews wrote: »

Half my ceiling collapsed 2 years ago - I rang the insurance company, their builder turned up, walked in my lounge, looked at the ceiling (or what was left of it!) & said 'wear & tear mate, insurance won't cover that'. He then told me that if I'd poured some water thru the floorboards in the room above (as you could see them) that I'd probably have been able to make a claim. I spoke to the insurance company & they told me they wouldn't pay out.

I had been with them for approx 8 years & had never made a claim! I of course cancelled my policy & moved elsewhere

For the record it was Liverpool Victoria & I no longer recommend them!

I had been with Liverpool victoria for a number of years for my house insurance. Last year, my 2 tots decided to destruct my living room. They marked with felt-tip pen all my furniture, from coffee table, carpet, 3 piece sofa, wallpaper. He also reached my camera from the mantle piece and chucked it on TV, breaking the camera and slightly marking the TV screen. I was upstairs ironing, totally oblivious to what was happening downstairs. Anyway, the marks would not shift, so I rang Liverpool Victoria and told them exactly how it was. As their were 8 different items (3 pc suite counts as 3 items), they treated it as 8 claims with 8 lots of excesses. They would not treat it as 1 incident. I did not want to go ahead with all the items, but was told it would still be logged on my file as a claim. As a consequent at my next renewal they refused me insurance for the future. Nobody will insure me now for household or building as it is linked, due to the amount of my claims.

This clearly is not fair, does anybody know how I can appeal or where I can go to have this case looked at. Any advise will be appreciated.

hoathfarm

MSE_Martin wrote: »

When you make an insurance claim, whether it's home, travel, health, illness or anything else, someone at the insurance company decides whether to pay it or not. Is it done on charts? Are there targets? How's it decided?

If you've worked in the industry why not dish the details to help MoneySavers?

Please post below to share your knowledge.

I RECENTLY MADE A CLAIM ON MY HORSE INSURANCE AS MY HORSE SHATERED 2 BONES IN HER KNEE AFTER BEING KICKED BY ANOTHER HORSE GETTING INTO MY FIELD. SOMEONE PLAYING GOD AT NFU DECIDED THAT SHE DID NOT QUALIFY FOR BEING PUT DOWN ON HUMANE GROUNDS, SO I HAVE LOST £3000. HAS ANYONE ELSE HAD THIS PROBLEM?

dunstonh

Nobody will insure me now for household or building as it is linked, due to the amount of my claims.

Claims on buildings insurance or contents insurance do not normally impact on each other unless you do a combined policy.

This clearly is not fair, does anybody know how I can appeal or where I can go to have this case looked at. Any advise will be appreciated.

If you are not happy with it, then complain to LVFS. If they are unable to resolve your complaint, that will allow you to then refer your case to the FOS. The FOS does appear to invoking the FSA rules on "treating customers fairly" which could be an issue here. However, they cannot force an insurer to take on your business. They can only get them to amend how previous claims were treated. i.e. was ie two claims or eight.

gettinbetter_2

When working in Saudi I bought my wife a watch, catalogue price almost £2000, Saudi price about £1000 but I had lots of time and after 3 months of my constant haggling got it for about £760. Included it on insurance policy and then my wife promptly lost it, I still had a sort of reciept and guarantee, insurance co. asked for customs declaration for when I had brought it into the country, they reckoned that I should have declared it!!!
Got paid eventually but only because a family member had some influence!!