Further Commentary on the CommInsure debacle.
Since posting my article yesterday (here) I’ve received many emails, texts and phone calls on the subject. An example of one of these is set out below.
“Hi Allan
I’m not sure if you’ve seen this article today, but it makes we very angry how the writer simply blankets every insurer as a mug that takes premiums and doesn’t pay claims when they’re valid. I think that is terrible that CommInsure could allegedly carry out those practices with their Insureds in disregard up utmost good faith in the claimants’ times of need, but to paint every insurer as doing that is plain unfair! I believe the vast majority of insurers try to do the right thing by their Insureds, whether it’s general or life insurance.
I’d be interested to hear your thoughts at some stage.
Regards
Adam [surname and email provided]”
The journalist who wrote the article to which Adam refers sets out an experience that the journalist had with what he thought was a simple water damage claim and the fact that he was made to feel like a criminal in putting the claim forward.
While not every insurer puts their clients through this, the reality is that many do and this is why our industry currently has such a poor reputation and has had for some time.
It is a reality that whenever there is a soft market there is more emphasis placed on claims and claims leakage, which can be an euphemism for paying as little as possible regardless of the insureds entitlement.
With all such things, I look at it as a threat but also an opportunity for insurance brokers and even for the claims preparation area of LMI who can now explain the importance of having someone highly knowledgeable in insurance working for the client to ensure that they are fully protected and that when a claim occurs they do receive a prompt and fair claims service.
One of the areas that I would like any inquiry to address is what I would call Claytons Covers. I’ve two situations on my desk at the moment where a customer has sought to have claims preperation fees approved by the insurer and has been refused. In both cases the insured is very elderly and the loss is in excess of $1,000,000 in one case $2,500,000. If an insurer is not going to grant permission to appoint someone to assist an elderly customer in such as circumstance, they are clearly never going to do so and therefore should remove the false cover from the policy. In the case of the Strata insurer, I have written to senior management after a similar episode a couple of years ago in Adelaide seeking that the section be removed but it still remains in the policy and the Insurer has never granted permission on any claim to my knowledge since and certainly is refusing to do so on this latest matter.
The trouble with all this is that it damages the brand insurance, and makes it harder for the thousands of honest, hard working insurance brokers and advisers, underwriters and claims officers who genuinely want to protect their insureds, communities and economy.
As I said in yesterday’s post I hope that it does make those who are involved in the questionable behaviour to have a good hard look at themselves and ask is the risk of reputation damage to their own organisation and brand insurance really worth it for it will out over time.