Insurance and Power of Attorney

kevinboardley

I have Lasting Powers of Attorney for my father.  I need to add insurance for personal possessions outside the home to his existing policy.  I called his insurer today and asked if they needed proof of the LPA.  They effectively ignored this and told me I could make changes on my father's policy.  I know that I have probably spoken to them in the past on the telephone in my father's presence and with his authorisation. But I am not sure they have ever had sight of the LPA.

Is it correct that I can make changes to his hoem insurance policy on his behalf without the explicit cover the of the LPA or would any policy so arranged be legally void in the event of a claim?

I probably should have taken the easy route and just pretended to be him but tryign to do the right thing!!

DullGreyGuy

An LPA deals with the fact that the principle may not be able to consent to authorise the attorney for one of a variety of reasons.

If your father has already given his authorisation to enable you to deal with his policy and there was no concerns raised on his capability to understand what he was doing then the LPA is unnecessary. The risks sit with the insurer rather than you as your father could, in theory, dispute he had given such authorisation either in absolute terms or in capability terms. As such I'd have thought they'd like a copy of the LPA for butt covering purposes but if they're comfortable that authorisation already held is sufficient thats their choice.  Clearly the risk is much larger if you were reducing cover rather than increasing it.

kevinboardley

Thanks.  My only concern is being protected against the insurer refusing a claim down the line should we need to make a claim.   For that I woudl prefer them to take the LPA reference (.gov.uk online) and confirm  that they have received and accepted this.  Otherwise it seems I just have to trust them/broker on basis of their word given on the telephone.  Would you trust an insurance company on that basis these days?

DullGreyGuy

kevinboardley said:

Thanks.  My only concern is being protected against the insurer refusing a claim down the line should we need to make a claim.   For that I woudl prefer them to take the LPA reference (.gov.uk online) and confirm  that they have received and accepted this.  Otherwise it seems I just have to trust them/broker on basis of their word given on the telephone.  Would you trust an insurance company on that basis these days?

I work in insurance my answer may not be the most common but yes. Calls are recorded and the Financial Ombudsman doesnt take well to companies that cannot produce call transcripts. 

Plus you wouldnt just be trusting them over the phone but would be receiving updated documents by email/post a few hours/days later to confirm the additional cover has been added. If they didnt turn up you'd be back on the phone asking where they are.

kevinboardley

Not worried about the additional cover being added!  Just that it is not invalidated if sownt he lien there is no proof that they offered the cover in full knowledge that I was not 'the insured' but 'the insured's' son, when they have not confirmed that taking instruction from me was okay with or without a record fo teh lasting power of attorney.

DullGreyGuy

kevinboardley said:

Not worried about the additional cover being added!  Just that it is not invalidated if sownt he lien there is no proof that they offered the cover in full knowledge that I was not 'the insured' but 'the insured's' son, when they have not confirmed that taking instruction from me was okay with or without a record fo teh lasting power of attorney.

They would be on a hiding to nothing if there is a schedule/certificate confirming the cover is there, it has been paid for and they then tried to get out of it by saying they shouldnt have taken instruction from the person they did. 

Almost certainly the claim would have to be paid, compensation for messing about and if they maintained they breached data protection rules, then a second set of compensation for that. 

user1977

Either it's covered or it isn't, I've never heard of an insurer trying to argue about some technicality around who instructed the cover.

kevinboardley

Still not convinced.  The first thing any insurance company asks when a clain is received is how to avoid paying and that's from insider knowledge.I thought that a basod tenet of insurance law is that a person can only insure property that belongs to them? That's why I want them to acknowledge that they have the LPA to cover me.

kevinboardley

...and to make sure my fathers belonging are covered for loss.

user1977

kevinboardley said:

Still not convinced.

What can we say which would convince you?

DullGreyGuy

kevinboardley said:

 The first thing any insurance company asks when a clain is received is how to avoid paying and that's from insider knowledge

Having personally paid out millions in claims it certainly isnt the attitude of any of the companies I've worked for (technically its probably billions if you include my reinsurance work). Yes we pay out to the terms of the policy so if you get £50 per each full 4 hours you are delayed and you are delayed 7 hours 50 minutes you'd only be paid £50 rather than £100 because you are only 10 minutes short of the next 4 hour block but a line is drawn somewhere and no matter where that is whoever is just on the wrong side will think they've been hard done by. 

kevinboardley said:

I thought that a basod tenet of insurance law is that a person can only insure property that belongs to them? That's why I want them to acknowledge that they have the LPA to cover me.

For non-life insurance you can insurer whatever the hell you like however to have a valid claim the policyholder must have an insurable interest at the point of claim. To have an interest doesnt require you to be the owner, if you lend me your car I can insure it on my policy despite not owning it because I would have a liability to you for damage I caused to it whilst its in my possession. 

For life insurance the insurable risk must exist at inception of the policy rather than at claim stage so if you lend me £100k over 10 years you could take out life insurance on me for £100k in case I die before repaying you. If I repaid you in full 2 weeks later it'd be your choice if you continued the life insurance and get the monies if I die in the next 9 years and 50 weeks or choose to cancel it.

In this case you are asking your fathers insurers to insurer his possessions and so there is an insurable interest. You are simply acting as his agent in making the arrangements, you arent insuring them in your own name. If you lived together then it wouldnt matter who the policyholder was as Home insurance covers the full household declared and their possessions not just those individual named as policyholders.