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

schoolfundraiser

andria_53 wrote: »

Hi

I work for an independent financial adviser and deal with life insurance, critical illness and healthcare insurance.

My advice would be to avoid like the plague the policies you see advertised on the TV that tell you you don't need a medical and that you will be accepted straight away without disclosing your medical notes.

In the event that you need to make a claim (I deal with death claims and critical illness claims etc), the insurer will pull apart the medical history of the insured bit by bit so if they are fully aware of medical history when the policy is accepted and issued they cannot reject any claim. And THEY WILL pull any claim apart so it is always best to take out any of these policies with full underwriting. The downside of disclosing any existing medical condition is that they may rate the policy which means they may bump up the monthly premium you pay but at least you know it's covered. The hotspots for rating of policies are: Blood pressure problems, being overweight, back problems and diabetes. Strangely, heart problems such as angina do not normally seem to attract great weighting of policy premiums as the health conditions above do.

What they also don't tell you on the cheapie policies is that unless you put the policy under trust (for your loved ones, family) at inception any payout will go straight to your estate and will be taxable. If it's under trust, it will not. Any quality insurance broker will tell you this.

Final words, for something as important as providing for your family or children in the event of your death, it's always worth paying just that little bit more to have the peace of mind that they will pay out.

I heartily endorse all of that as I am still waiting for the payout on our expensive joint £22K life policy (taken out 14 years ago when my husband was a smoker which was disclosed and younger and fitter ) 10 and half weeks after his death from a very sudden and unexpected heart attack. (He had to have a post mortem to determine whether it was natural causes which it was.)

The insurance company took 4 weeks to ask for a medical attendant's report from his GP and by the time the practice received the request they had sent back his paper notes to the health authority for storage having held on to them for a month as is normal practice. So of course his notes can't be found. Not that they would help as he was in good health - normal cholesterol levels normal blood pressure and he had given up smoking six years ago and only went to the docs with such as a bad foot (went to casualty for an X-ray just sprained etc) and sinus infection after a cold.

To get the insurance company to do anything to speed it up to get it to the underwriter stage I had to cry down the phone (and believe me by this stage I was a nervous wreck living on my credit cards with no income coming in at all and funeral expenses needing to be paid). But two weeks later I am still waiting and my complaint is drafted as I kept copious notes of all telephone conversations and the gp practice manager has been most helpful with dates and procedures etc.

Needless to say I won't be using this very well advertised and well known company again ever. There is a reason they advertise so much on the TV - they must need to get new customers all the time as they certainly don't do anything to keep their old ones.

:eek:

It is hard enough being widowed without the money problems it causes - your husband's bank accounts are frozen your child tax credit ceases until you reapply your income drops dramatically and you're having to print money to pay for the funeral. Then the insurance companies start taking the mickey on the policy you have paid out on for all those years!

schoolfundraiser

mattymoo wrote: »

It will be clearly laid out in your policy booklet, normally on the first page or last page. It will have an internal address for your complaint to go to and an explanation of what will happen. If you are unhappy with the insurers decision following complaint, you can then take it to the Financial Services Ombudsman. Again, the address should be provided.

Eight weeks after you have made your complaint to the company you can make it to the Financial Services Ombudsman regardless of whether the insurance company has replied or not. You do not have to wait for them to sort it out before you get on the the FSO.

Can't remember where exactly I read that - maybe on the FSO website

skjchance

I work in the mortgage industry and deal with life assurance and critical illness claims. The main thing that the insurers say stops them paying out on claims is undisclosed information. Every question on the application form needs to be answered thoroughly and if you are not sure put it down. It may take longer for your insurance to be accepted initialy but it is better than finding you are not covered later because you didn't think something was relevant.

Make sure you read all the small print to see what you are and are not covered for and when taking out insurance they should provide you with a quote and a document called Kay Facts. Make sure you read these so you are sure you understand the cover.

Also a warning with horse insurance and theft claims. We had our stables broken into last year and bridles, saddles and other tack taken. There were three of us with different insurance companies and only one paid out. Luckily it was mine as I had two horses there so double the amount of stuff. The main reason was that they said the equipment wasn't secured behind a Yale lock. It was however secured in a steel shipping container and locked with a padlock that cost £75. The theives could break the padlock off though the police said they had tried so had used a blow torch type thing to melt through the container. The police gave us all a statement to send to the insurance company confirming it was well secured but still the other insurers would not budge on their decision. My insurer was NFU Mutual, maybe slightly more expensive but certainly worth it in this case.

skjchance

bouncydog1 wrote: »

V interested in your post as just about to effect renewal and considering NFU.

Looking at their policy conditions for loss of animal, it is covered if animal is put down on humane grounds without NFU's written consent provided vet certifies that the injury, illness or disease is incurable and the suffering so excessive that...to delay would be an act of cruelty.

Putting down on humane grounds is also covered with NFU's prior written consent, which does not have to be carried out immediately.

What does your vet say?

If your vet certified that she should be put down then I should appeal to NFU or following that the financial ombudsman.

If you took the decision to have her put down without vet certification then I guess they are declining the claim because you did not follow policy conditions.

:T Mine is with NFU and they have paid out where my friends haven't so I would recommend them.

mattymoo

skjchance wrote: »

Also a warning with horse insurance and theft claims. We had our stables broken into last year and bridles, saddles and other tack taken. There were three of us with different insurance companies and only one paid out. Luckily it was mine as I had two horses there so double the amount of stuff. The main reason was that they said the equipment wasn't secured behind a Yale lock. It was however secured in a steel shipping container and locked with a padlock that cost £75. The theives could break the padlock off though the police said they had tried so had used a blow torch type thing to melt through the container. The police gave us all a statement to send to the insurance company confirming it was well secured but still the other insurers would not budge on their decision. My insurer was NFU Mutual, maybe slightly more expensive but certainly worth it in this case.

Can also apply in other types of insurance as well - notably household and commercial insurances. Cheap, package type insurance policies often apply a security condition and stick rigidly to it no matter what.
Better insurers, and I would class NFU and Hiscox (in private insurances) among these tend to write the business and settle the claims on their merits. As a security surveyor for a commercial insurer I can assure you your £75 padlock stood a better chance than a £15 Yale lock. They may have meant a 5 lever mortice deadlock but these are only ever as strong as the door and frame to which they are fitted.
So why did the insurers refuse the claims because of the lack of a £15 yale lock? Because that is what is in their policy condition and they have no authority to deviate from it. Have also seen it on household policies where inexperienced staff have turned down household theft claims where a 5 lever mortice deadlock was not fitted to the door. When you look closer, the door is UPVC and incapable of being fitted with a 5 lever mortice deadlock, either in the factory or retrofitted.
It is a problem with call centres and internet insurance. The imposition of a one size fits all solution. This is fine if you live in a 3 bed semi of modern construction but no use at all if your property or lifestyle is different in some way.

harryhound

I was taught 40 years ago that only 50% of premiums (for the type of claims we are talking about) ever get paid out as claims, so if you can withstand the worst possible claim, don't take out insurance.

I'm not absolutely sure this is still good advice, because these days everybody sues everybody, and even I cannot withstand a 7 figure hit;) but I've saved a fortune over the years and I have not had to pay for the other people who seem to have all these disasters.

Cross your fingers for me but I've had one burglary in a life time and my last motor claim was in the 1960's (fell asleep and bounced off a lamp post).

Harry.

FlameCloud

Hopefully I can be of some help here.

I work in the special investigations department for one of the largest underwriters. We underwrite a policy that has, shall we say, got a reputation for dodgy claims (around 75% we reckon). As a result, we have sold the interest in the policy to RSA (fools! ). Part of my job is to register claims for that particular policy (it is so bad they have decided that all claims will be vetted by SI before being allowed to continue) so I have some experience in this area.

Firstly, I would ask the customer to describe what has happened, as this usually gets an answer. I would then check what coverages they had whilst they were telling me. I find you can usually tell within moments whether you will cover it, my allowing the customer to talk you usually give them enough rope to hang themselves. It is not about being harsh, meeting targets etc. I know the policy inside out, and if your claim should be paid under the policy I will register it, if not then I will decline it on the spot. If you disagree, you can argue, but it will not make a great deal of differnce if it is clear from what you have said that it is not going to be covered (i.e. 'My TV's stopped working. Can I have a new one' No, from what you've said, its clearly wear and tear, mechanical breakdown. If you disagree, prove it through an engineers report.)

What happens next depends on the type of claim. Broadly-

Escape of Water (EOW), passed straight through to loss adjusting side or resotaration companies for a full report.

Accidental Damage, loss or theft. Put customer on hold, perform a CUE search there and then for undisclosed claims, Check their bank balance for arrears/difficulties, analyse the voice graph we have to check for signs of stress in voice. If happy, appoint suppliers. If not, either appoint Crawfords or Cunningham Lindsy Fraud solutions for a full investigation, or VFM/Aquilo/internal for conversation managment.

The rest- judge on their own merits. Try and pay it out there and then, as it is not normally worth our while keeping it for longer.

For example of what we do in a day- today I recieved-
5 AD to laptop claims (all water spilt on them)
6 AD to carpet caused by paint spillage

4 of the carpet claims we thrown out as a few days earlier they had said to one of us that their dog had done its business on it and was declined. 3 of the laptop claims, CUE threw up undisclosed claims, so I referred the matter through to the underwriters to void the policy.

hope it helps! What you say and how you say it REALLY matters. Be an !!!!, and I can guarentee you will get the handlers back up enough to be difficult. If you are really abusive then we will go out of our way to pick something up

Madeleine53

A word of warning. Be careful when insuring your animals with the NFU. Last year, one of my dogs developed a terminal condition at only 6yrs old. He had to have specialist assessment, MRI scans etc. which the NFU paid without quibble. HOWEVER, when he had to be put to sleep and we put in a claim for his purchase price there was trouble. Sent in the form, heard nothing for weeks so 'phoned. Person in 'animal claims' said because he was 6yrs old he was worth nothing!!!! This was a Crufts prizewinning dog in his prime with potential for stud. Informed person of this but they said 'get proof of this, ask some breeders to state their opinion of the dog's worth'. Yea right, could just have asked a few friends to lie if so inclined. However, they called back later and said they had ascertained we were telling the truth and a cheque was in the post. Believe me, this is a very much shortened account of what took place - we were appalled by their attitude. However, it is a good policy at a good price so we have insured the new pup with them! (at least one gets to speak to a human being straight away - unusual now). We've often wondered how they found we were telling the truth.

Moral of the tale:- your beloved pet depreciates in value from the minute you take him/her home it would seem.

mattymoo

FlameCloud wrote: »

Accidental Damage, loss or theft. Put customer on hold, perform a CUE search there and then for undisclosed claims, Check their bank balance for arrears/difficulties, analyse the voice graph we have to check for signs of stress in voice. If happy, appoint suppliers. If not, either appoint Crawfords or Cunningham Lindsy Fraud solutions for a full investigation, or VFM/Aquilo/internal for conversation managment.
4 of the carpet claims we thrown out as a few days earlier they had said to one of us that their dog had done its business on it and was declined. 3 of the laptop claims, CUE threw up undisclosed claims, so I referred the matter through to the underwriters to void the policy.

hope it helps! What you say and how you say it REALLY matters. Be an !!!!, and I can guarentee you will get the handlers back up enough to be difficult. If you are really abusive then we will go out of our way to pick something up

Have edited your post into 2 bits I want to query.
Firstly, do you advise the customers you are using voice stress analysis (Digilog?) systems?
Secondly, are you actually delving into bank accounts or getting an online credit report. I seem to recall you work for Halifax so presumably you can look into the banking side from the insurance side.
Third item - you refer to the CUE database and undisclosed claims. Are these claims that have arisen since inception of your policy (suggesting multiple insurances / claims) or where they on the CUE db prior to inception. If so, why is your organisation carrying out its underwriting at the claims stage and not at the inception stage?

mattymoo

harryhound wrote: »

I was taught 40 years ago that only 50% of premiums (for the type of claims we are talking about) ever get paid out as claims, so if you can withstand the worst possible claim, don't take out insurance.

Across the industry the figures will typically vary between 80-110% of losses as a proportion of premium. A bad year would be 110% and in the past investment returns would cover this but that is getting harder these days.
Of course, insurance is a common pool of money so the large payouts (fire losses, major motor accidents, fatalities etc) will skew the figure for everyone else. Many people may find that over the last 10 years they have paid £2,000 in premiums (household) but only claimed say £200 so a 10% loss ratio. You might consider a higher excess in return for a lower premium in these cases.