| Normally there are a number of reasons why | | | | 85-90% with only a few performing in the low |
| insurers fail to pay or deny insurance claims. The | | | | ninety percents. What this means is that insurers |
| principal ones are: | | | | are losing annually anywhere between 5-15% of |
| 1. Non Disclosure of material fact; | | | | their client base. Most insureds are unaware of |
| 2. Failure to abide by the doctrine of the utmost | | | | this as the only time they know the value of |
| good faith; | | | | what they have bought is when they have a |
| 3. Fraud and/or overcapitalisation of loss but the | | | | claim. In some cases they are less than |
| latter only applies to deny that part of the claim; | | | | impressed. |
| 4. Arson as a subset of fraud; | | | | Internal disputes resolution was introduced by |
| 5. An inability of the insured to provide any or | | | | insurers to provide a better outcome for their |
| adequate strict proof of loss; | | | | clients. Unfortunately some insurers treat claims |
| 6. A breach of policy conditions; | | | | as a process and have commoditised them. This |
| 7. A failure by insurers to properly apply policy | | | | is supposed to produce a better outcome for |
| conditions (eg. co-insurance, average or a | | | | clients and, to be fair, in some cases it does, yet |
| misapplication of theft or burglary sub-limits as | | | | in others it cannot as one process does not fit all |
| applied to jewellery or the misapplication of the | | | | claims. Some insurers believe that by treating |
| condition precedents, or condition subsequents to | | | | claims in this way they are able to provide better |
| the policy); | | | | customer service, speedier resolution of claims, |
| 8. A failure by insurers to properly investigate and | | | | more effective control over costs, reduced claims |
| assess a claim. | | | | settlements and improved retention rates across |
| Unfortunately some insurers lack real insurance | | | | all classes of their business. It cannot work for all |
| claims expertise as too many people are leaving | | | | as it does not take into account the individual |
| the insurance industry. Despite the rhetoric most | | | | circumstances of individual claims which fall outside |
| claims are treated as commodities. Many | | | | the norm and which therefore require a different |
| customer service officers, individual client service | | | | approach. It is in this area where real expertise is |
| managers or claims clerks have very limited | | | | needed and as is so often the case many insurers |
| experience whether they are dealing with | | | | do not possess it due to high staff turnover as |
| corporate, commercial, business or personal lines | | | | claims is not seen as being "sexy" nor providing a |
| or domestic claims. The reality is that there are | | | | secure career path. Unfortunately inconsistent |
| more claims to be processed and less capable or | | | | claims decisions means that sometimes the |
| experienced people to deal with them which | | | | insured fails to achieve true indemnity under the |
| affects claims decisions. This is not helped | | | | policy whilst the insurer loses a client. This could |
| because some insurers are so totally shareholder | | | | amount to having the claim denied, refused in |
| and cost driven they overlook the need to | | | | part, incorrectly quantified or misunderstood. |
| protect their client base. Insurers talk about their | | | | Whether you be an insurer or an insured and you |
| retention rates which is the percentage of policies | | | | become involved in a problem claim seek |
| renewed annually with them yet many are | | | | independent legal advice from LAC Lawyers. |
| struggling to maintain retention rates of between | | | | |