General question on insurance

[edb49]

I've got a general question on insurance that I was wondering if someone could help with.

 

When an insured loss happens, the insurer is responsible for "putting it right". If it is at their discretion whether they either repair it or cash settle, and there is nothing in terms of timescales in the contract, why do they ever have to settle it? Why can't they simply keep bouncing correspondence to and fro for years before paying out?

[Mwynci]

Putting timescales within a policywording would be a nightmare, no claim is the same. Some policies such as payment protection, sickness policies do have timescales as they are easier to manage, but others just have too many variables.

Regarding when they pay, they could hold out forever and the money could sit in their bank, hwoever it's not really in their best interest to do that as their accounts are worked upon how much they are going to pay out per claim, to hold back just becomes a false ecconomy and could end up producing cheaper premiums which will not balance off.

The likes of the FSA, the FOS and the courts are there to keep an eye on them.

[edb49]

I agree that putting timescales in would be a nightmare. But for example, if you had a car crash, what if they said the first time someone could look at the car was 30 days? Or 60 days? Is there anything you can do to ask them to look at it more quickly?

[unclebulgaria67]

I agree that putting timescales in would be a nightmare. But for example, if you had a car crash, what if they said the first time someone could look at the car was 30 days? Or 60 days? Is there anything you can do to ask them to look at it more quickly?

 

There is no point answering hypothetical questions, as I can't see any Insurer deliberately delaying any claim. There may be occasions where they could be a delay e.g a major flood or storm event where say thousands of vehicles were damaged at the same time.

 

My experience with Insurers is that they are thoroughly professional in the way that they work. I have dealt with major weather events and from what I have seen within the industry, the Insurers waive some of the red tape that might delay a claim, by accepting independent garage inspections for example when engineer inspections may be delayed.

 

So if your thrust is that Insurers delay claims or try to frustrate policyholders in order to avoid claims, my experience does not chime with that. Whilst policies do not explicitly guarantee timescales for claims, Insurers are heavily regulated and if they provided a poor service, they would get found out. Not to mention the poor reviews that would be all over the internet, including these forums.

[edb49]

Although it's a hypothetical question, it is based on a real situation. Clearly it is in the interest of the insurer to handle things slowly... the longer they take to pay out, the more likely it is the insured will accept a partial settlement, and the longer they can invest the capital for.

 

So is there any obligation in law for them to handle things reasonably? What's to stop an insurer taking 6 months to resolve a claim when it would be possible to resolve it in 1 month? I'm not saying 6 months would be unprofessional, it would just be far slower than is necessary.

[unclebulgaria67]

You obviously have a particular problem with a claim which I cannot comment on without the details. But the FSA rules for claims handling are contained in this link.

http://fsahandbook.info/FSA/html/handbook/ICOBS/8

 

I don't believe Insurers do delay claims, but with some companies their systems/staff don't provide much confidence. Over recent years, many Insurers have cut costs to the extent that they have had a severe impact on customer service.

 

My advice for what it is worth, is that if you have had a problem, register a complaint as high as you can, try to force them to issue a final response letter if you can't get agreement and then pass it on to the FOS. If you can't be bothered with the wait at the FOS, issue court proceedings, which will soon get them to pay attention.

[edb49]

Thanks - this is very helpful. I am not sure how to use the legal system to get them to act in a reasonable timeframe though. I am sure once they have agreed on the quantum for a loss they'll pay it quite quickly, but what can you issue an action for if the amount of the loss is not agreed?

[unclebulgaria67]

Thanks - this is very helpful. I am not sure how to use the legal system to get them to act in a reasonable timeframe though. I am sure once they have agreed on the quantum for a loss they'll pay it quite quickly, but what can you issue an action for if the amount of the loss is not agreed?

 

If they are dragging their feet, you can issue a letter before action stating that they are effectively in breach of the spirit of the Insurance contract by unnecessarily delaying the claim and therefore if they don't come forward with settlement proposals with say 21 days, you will have no alternative but to take forward county court proceedings against them.

 

Send it recorded to their head of claims and it should get their attention. If you point out the problems you have experienced and that you are seeking amicable settlement, hopefully they will take up your offer. If you don't then the hard part then is to make the case on the court claim papers, for which you will have to look at the grounds you have. This is where you should post to a legal forum or take advice from a solicitor, where people can guide you better on the legal side.