Does Insurance Pay? The BIG question.

Dunscrimpin

In my previous thread, bemoaning the catchall clause highlighted by the insurance company denying any responsibility for damage done by malicious tenants, I asked if others had been poorly treated similarly.

This has made me wonder, how many of us actually benefit from being insured, in whatever form?

Does the denial culture of the insurance companies represent a form of unfair trading?

I would be obliged to know whether Martin, or any of the site regulars have any views on this, and what concerted action could be taken to reverse the balance of power.

D.

soolin

With regard to insurance in general I think it does pay to be properly covered.

The reason so many claims are rejected is that people misunderstand how insurance works and particularly with contents insurance have the lowest amount they can get away with on the assumption that they will never have to claim for 'everything'. If you are not fully covered then you will only get a perentage back if you come to claim.

Two Christmas's ago we had a major problem with the house, which resulted in hundreds of gallons of boiling water cascading through the loft into a bedroom and down through to the ground floor. WE were warned that the assessor would take into account everything we had in the house before they would agree a 100% claim to ensure we were fully covered.

When the assessor came she couldn't have bene nicer. Agreed we were adequately insured and gave me a cheque in just a few days to cover all the emergency items like bedding, beds clothes etc that had been spoilt. They arranged builders to rebuild ceilings, lay new floors, build new fitted cabinets to replace one that was waterlogged.

In fact at the end of it the house looked better that when we started. Some years earlier on the other hand my cousin has received only a quarter of her claim for water damage on the ground floor as the assessor said her insured value was only 1/4 what it should have been so each claim would be proprtionally reduced.

Soo

lisyloo

With regard to insurance in general I think it does pay to be properly covered.

My own personal opinion is that you should self insure for whatever you can.
Clearly you can't do that for very expensive items, but you can for cheap things.

Let's take a £200 bicycle for example.
Can you afford to replace if without too much stress? If you can then it's probably cheaper overall to self-insure.
This is because insurance companies make profits and also there are fraudulent claims.
Therefore it stand to reason that self-insurance is better value "overall" than paying for insurance.

You can do this partially on some items by getting a large excess.
i.e. large excess on car insurance or medical insurance.
This means you are insurance yourself agains large bills but self-insuring on the small things.

Please not I am not suggesting that you go uncovered.
Simply replacing formal insurance with self-insurance IF you can afford to and are comfortable in doing so.

dunstonh

You should insure yourself for things that see you facing a financial loss in the event of a claimable event.

Insurance companies offer contracts that tell you what is covered. If you choose a policy that doesnt cover an area that you want covered, then do not proceed with that policy and go with one that does. It may cost you more but in the event of a claim you wouldnt be in the position you are now. If you choose the third party fire and theft option, you do not get the same cover as comprehensive. The same applies to house insurance. Saving pennies on the premium is great but you shouldnt compromise cover in doing so.

lisyloo

If you choose a policy that doesnt cover an area that you want covered, then do not proceed with that policy and go with one that does.

Good idea in principle but I would suggest that it is difficult in practice especially with house insurance.
I have a long "wish list" but want a good price so sometimes it's a trade off.

e.g.
accidental cover
legal insurace
bicycles
valuable
personal possession
emergency cover etc.

I fnd it difficult to find a policy with the right cover (they often have limits) without paying a fortune for a custom version.
Like many things sometimes you ahve to make a compromise.

dunstonh

I have a long "wish list" but want a good price so sometimes it's a trade off.

But that is the key issue isnt it. Its the trade off that everyone does.

You cannot blame the insurer though when something happens that you chose to not to pay for.

Phonix

In regarding to the the insurers paying out, I'm more concerned about terms and conditions than insurance type

dunstonh

Phonix wrote:

In regarding to the the insurers paying out, I'm more concerned about terms and conditions than insurance type

There are household policies that are specifically designed for let properties. Normal buildings insurance policies tend to add all sorts of conditions when its let out.

I know nothing about your policy but I am guessing it is a normal household one with conditions applying.

lisyloo

You cannot blame the insurer though when something happens that you chose to not to pay for.

I agree.
If you are making a compromise or tradeoff then you should be aware of and prepared to take the consequences.

I am because I would have to pay a fortune for all the cover I wanted.

howardtom4y

In reply to the original post, having worked in insurance for over 20 years, most of the time in claims, I would have to defend against a lot of the vitriol that is directed at insurers. There are some times that insurers do get things wrong but in the vast majority of cases in my experience they do the right thing.

What most people forget is that when you take an insurance policy out it is a contract between you and the insurer. In return for a premium insurers promise to pay you money when certain events occur. There are circumstances and events that are excluded in any policy and it is up to the individual to understand what he is buying. The price of the premium is often the only consideration in peoples mind when they take out the policy but what you should consider is that what you are buying is in effect a promise. You should therefore understand what it is that you are buying. If you do not understand then either choose a policy which is simplified into plain english or use the services of a reputable insurance broker. Part of their job is to advise you on what insurances are available,what you may need and the cover they provide. They should also assist in determining the sums you should insure for.
With house contents insurance a rough guide would be £10,000 per bedroom.

The key is do your homework before you buy and do not always go for the cheapest option.

If you decide not to insure that is your decision to accept the risk yourself, but be aware of the consequences should the worst happen. I cannot forget one claim I was involved with when a house was completely destroyed by fire. The occupier was lucky to get out alive but lost all his possesions apart from his pyjamas and slippers which he was wearing. I was working for the house insurer and all we could do was arrange a taxi to take him to a nearby hotel, until the house was rebuilt. He had taken the decision many years before not to insure his possessions and ended up with nothing. His car was also destroyed in the fire and that was insured for third party only.

Dunscrimpin

Thanks for all the replies,

I've been out of the country, and didn't get the chance to say that the policy in question is one specifically designed for rented, tenanted premises building cover, as provided by Endsleigh ( although I have since discovered, that it is farmed out to IGI and Zurich, and that any claims must be made to IGI, whom I had never heard of before, and would not have taken a policy with, had I been made aware of their interest). The policy was expensive, and I asked the Endsleigh employee, whom I visited at their premises in Edinburgh at the initial point of purchase, for a policy to cover all eventualities of damage, which might arise from the occupation of my flat by tenants.
I was at no point told, that the policy did not include for damage caused by any occupants, quite the opposite in fact. My point is, why have and pay for insurance, when it is the case, that the policy has a nasty little ambiguous clause, tucked away, which bars you from making any kind of claim for the purpose the policy was taken out in the first place. Have others experienced this duplicity, and rank dishonesty?
D.