Making an insurance claim is inherently a stressful time. After all, you are only making the claim because something has happened to you that you wish hadn’t. It doesn’t matter what the claim is or how significant it is, your singular grain of comfort when you have to make a claim is the knowledge that you are insured and despite the trauma you are going through, you take comfort in knowing that you have paid your premiums on time to the big and trusted insurance company. That’s right to the insurance company that promised in all it’s marketing literature and advertising that they will look after you when you need to make a claim.
Yes, my words are laced with irony because along with that trust you now are relying upon, you have a quiet voice of doubt trying to be heard. This voice of doubt is a little more cynical, some same worldly wise, but it exists. It feeds on your concerns and deepest fears that your insurance policy might not cover you and leave you so out of pocket you wont know what to do next.
Thankfully outright refusal to pay a claim and honour the agreement you have with your insurers is very rare, but it does happen. Just ask the victims of the storms and subsequent flooding at the the end of 2015 & beginning of 2016. I am also certain that you have heard of a friend of a friend who had their claim turned down. When it does happen, most insurers have a good reason, even though it may seem very harsh and unfair. Unfortunately I have found that even if they are justified, it was rarely the policyholders fault, in that the errors legitimising the voidance are frequently down to the process of taking out insurance.
However, that really isn’t the point of this post. You see, that quiet voice of doubt and fear wont go away when your claim is accepted. It will nag away, in part because you are ignorant of the process and what your rights are, but because you have to invest all of your confidence in the integrity of those handling your claim.
There is a well known expression that there ‘is honour amongst thieves’ and in my view this applies to insurers, their adjusters and supply chain too! You must remember that every party engaged with your claims process is a business whose sole raison d’être is to make money and maximise profits. Yes that may appear cynical but it is a fact and actually the businesses legal obligation to its shareholders. Someone wiser than me explained that their are only 3 ways to make more money in business:
- Find new customers
- Sell more to existing customers by up-selling/upgrading or selling additional allied product
- Cut costs
So how does this feed your fears & mistrust?
Insurance companies have spent huge amounts of money buying your business in the form of advertising, general marketing and sponsorship. Then when you are a customer they seek to entice you into purchasing more and more products and services. They do this because it makes them money, lots of money. This meets the first 2 ways of increasing revenue.
The 3rd way – cutting costs is where the problems lie. Let me explain. We are all aware of call centres and how you are no longer handled by an individual but rather your query is processed in much the same way Henry Ford built his famous Model T. Your query, or in this instance your claim, now has to fit in the conveyor belt system designed to make the handling of your claim efficient. For efficient, read less costly. As such your claim has to fit into their systems.
Next when the claim is accepted and the process passes to how they will settle the claim, insurers have put in place agreements with their supply chain that minimise the cost of the claim and controls the process, leaving you on the outside, once again hoping all will be ok in the end.
Receiving that cuddly toy or ball point pen for the privilege of purchasing their policy may not seem so useful. After all, and I don’t mean this as a slight to opera singing meerkats, but I really don’t think that cleaning, decorating, rebuilding etc is their expertise. Maybe I’m wrong maybe I’m not.
As a sidebar, it is interesting that their isn’t an insurance company or comparison website shouting from the rooftops all of the wonderful testimonials that their claims process have generated.
Anyway, back to my point about cutting costs. So you can see how insurers have structured themselves to sell more and cut costs, but there is a further cost that they have sought to cut. That is the claims cost itself.
I am not just talking about the value of the claim, but they have reduced significantly the amount they pay the so-called experts i.e. Loss adjusters who act on their behalf. In doing so the loss adjusters have had to do a number of things:
- De-skill their workforce
- Process your claim
- Enter into commercial agreements with their own supply chain to generate additional sources of revenue out of your claim
All of this is done to squeeze as much revenue as they can out of YOUR MISFORTUNE. Let me be clear, this is what business is about – maximising profits. Unfortunately your claim is the only place many businesses make their profits. So who’s interest do these parties work for? Have no doubt it isn’t yours!
For the record, there are some outstanding individual adjusters, suppliers etc who recognise that doing the best possible job is in their long term interests and will engender customer goodwill and loyalty. Regrettably this is becoming less and less common. It isn’t a dig at the integrity of those involved within the process, after all they are honouring their businesses legal obligation to maximise profits.
I have for almost 30 years said “insurers want to pay you, they just don’t want to pay more than have too, if at all”. My belief in that statement remains absolute, otherwise I wouldn’t be able to work in the interests of my clients. It is just that the deck is becoming stacked against you.
My advice to you when making a claim is that it is the time for you to be unreasonable and not cower in fear your claim wont be dealt with. Own the process – its your claim to make, not insurers to dictate – and stay focussed on what is important and that is having your home, life and business reinstated as if nothing had happened.
I want to leave you with a quote I heard years ago from one of the founders of a well-known bookmakers. He was being interviewed and the reporter said – “it’s a good business model you have there” In reply the reporter was told, “I know, I have 3 windows collecting money and only one paying out!”. Everyone knows that betting is the proverbial gamble, just most don’t realise that the odds are just as bad when making an insurance claim for you to pick a winner.