When is insurance NOT insurance

losgiganteskid

In the dim and distant past I recall a situation when a product was called "insurance" when in fact it was merely a replacement facility for missing goods. For the word "insurance" to be used I believe it has to be underwritten by an insurance company.

eg Cotton Traders charge .48p as an optional add on to an order which provides "insurance" can it be described as that ?

dacouch

Insurance is generally a "guarantee" that your valid claims will be paid.

Insurance companies within the UK and "passported" in from European Countries are highly regulated to check sales process and ensure they have the liquidity to pay claims.

In the event of an Insurer going bankrupt, the FSCS would pay out valid claims at 100% or 90% depending on the claim.

A non insurance product eg Curry's "Whatever Happens" which they describe as a "Service Plan" as it's not insurance backed has similar protection to a normal business eg if they don't have enough funds to pay claims then you join the list of other creditors (Behind priority creditors such as banks and HMRC) and may or may not receive part of your claim

http://www.fscs.org.uk/what-we-cover/compensation-limits/insurance-limits/

losgiganteskid

Don't suppose Cotton Traders are paying any IPT on their sales !! - but if their product isn't insurance they wouldn't have to, but neither should they be calling it "insurance" ;)

sheramber

Cotton Traders Insurance

For just 48p, in the unlikely event that your order does go missing in transit we'll arrange an investigation with our courier network and dispatch an immediate replacement, subject to availability. If stock is no longer available we will offer an immediate refund. Please delete from order form if not required.

paddyandstumpy

Based on the above it sounds like it's auto opt in, which I didn't think was allowed any more!

dacouch

sheramber wrote: »

Cotton Traders Insurance

For just 48p, in the unlikely event that your order does go missing in transit we'll arrange an investigation with our courier network and dispatch an immediate replacement, subject to availability. If stock is no longer available we will offer an immediate refund. Please delete from order form if not required.

A waste of money when you take into account Cotton Traders are contracted to deliver the parcel to you, if it does not reach you that is their problem not the customers.