Why Insurers Don’t Pay Claims…..As Red Adair famously said ‘If you think it's expensive to hire a professional to do the job, wait until you hire an amateur’
Buying an insurance policy today is easy and relatively quick to do and it will sit there in your folder or drawer gathering dust without drawing attention to itself. Most people forget it’s there until a claim occurs and you dig it out and start to look at the small print. At exactly the same time your insurers are doing the same so they can validate your claim and also check you have complied with all of the terms and conditions or warranties within your policy. These are the things your policy says you must do, for example fully set your alarm when closed or things you must not do, for example you may not be allowed you use portable heaters.
Here are just three examples where claims are either turned down or not paid or where the actual settlement offer falls well below the loss you actually suffered or the amount you expected to receive.
Non-disclosure of a material fact
Where do I start? Have you read your ‘statement of fact’?
Most policies issued today contain a statement of fact which is the basis upon which the cover is provided, and it details the information which has been provided to the insurer during the quotation process. If this information is not true or accurate there are numerous opportunities for your insurers to avoid paying your claim. In some cases they could even cancel your policy leaving you totally uninsured. This is not a rare occurrence and is in fact extremely common and if this concerns you Premier Insurance are here to help and assist you. We are happy to do a mid-term review of your policy to ensure your fully protected.
Failing to comply with a condition or warranty
We can’t help but focus on the actual cost of the insurance cover after all the advertisements we see all highlight the speed of which you can obtain a quote and the promises to beat other insurers prices. The knock on effect is often to overlook key components of the relationship between policyholder and the insurance company. Most buy insurance for peace of mind that they will be financially compensated should they be unfortunate enough to suffer a loss. Overlooking these key components can leave you upset and distraught and facing severe financial pressures.
An insurance condition or warranty is something specified in your insurance schedule or policy which you must adhere to maintain the protection of your policy. If you do not comply with the condition or warranty it is a breach of the contract and insurers can avoid paying the claim.
A condition may require you to comply with certain standards such as having specific door and window locks as detailed in each insurers minimum security condition. These vary from between insurance companies so it is essential you check you can still comply when you move insurers. A condition can also require you not to do something, for example, excludes the use of portable heaters within the premises or another common condition excludes the storage of combustible materials such as waste within a certain distance of your premises. It is common for a policy to have several conditions or warranties applying and it is essential you comply with all.
Under insured – Average
It is suggested over 40% of businesses in the UK are under insured and this highlights the true risks your business faces in the event you need to make a claim. Every policyholder must contribute fairly to the premium pot. This means your policy premium must be based on up to date and accurate sums insured. An insurer will normally appoint a chartered loss adjuster to handle your claim and where they calculate your policy does not have adequate sums insured they will apply Average to the claim. Simply insurers will look to proportionately reduce your claim payment in line with the % you are considered to be underinsured. A loss adjuster is typically appointed to any claim exceeding £1,500 so it is easy to visualise that any % applied to reduce an insurers claims payment can quickly escalate to a significant value. A £10,000 claim where average is applied at 20% will ultimately cost you £2,000.
How can we help
These three common experiences can be avoided or mitigated by employing the right professional.
Will Ellis - 01606 863400
When you insure with Premier Insurance you can be sure you are in the safe hands of an experienced insurance professional acting for you, with your best interests paramount to everything else. We will give you the right advice and guidance for you to make an informed decision so you can buy the right insurance protection suitable for your or business needs. Our competitive insurance quotations will give you the flexibility to tailor your policy to your specific needs so you only pay for the cover you want.