The insurance claims market is constantly changing, and usually in ways driven by the insurance companies themselves. We have noticed, and I’m sure you have too if you have been monitoring the press recently, that the insurance companies are changing the way they are dealing with claims. This is in our view, in order to slow down the payment of settlements. Don’t get me wrong, we are in no way implying that your insurers will not pay the claim, we are stating however, that they are taking longer to do so.
Here- to- fore, property damage claims were being dealt with, very quickly and we were constantly hearing from loss adjusters that they were under pressure from insurers to meet deadlines in relation to first visits of sites of damage. And then further deadlines in relation to producing reports, both preliminary reports and final reports to the insurance companies in order to progress the claim to settlement as quickly as possible. Payments were based cash with no effort by insurance companies to undertake any replacement or reinstatement work themselves
The changes we are seeing currently are probably driven by the shortage of money worldwide and the impact this is having on the insurance company’s bottom line. We are being told that premiums are falling. The competition in the market is driving premiums down and claims are increasing in volume and value year on year. This is having an obvious effect on insurers’ bottom line. The response by some insurance companies to these circumstances is, in our view, contrary to good practice and certainly not in the claimant’s interests.
All insurance policies require that the insurance company be notified of the claim within a very short period of time following the event giving rise to a claim, 7 days or less usually. The lack of consumer protection in this area however, creates the position that these deadlines are one-sided only. There is no requirement of the insurance company to make payments within any given time frame in Ireland. There is no pressure on the insurance company to complete their investigations in any given time frame whether the case is an honest straightforward claim or otherwise. Delays in dealing with claim settlements, particularly in the current market where people are under financial pressure in relation to their mortgages, other expenses and personal incomes, which may be falling because off redundancy or otherwise, is simply another burden that is unnecessary and unreasonable.
The insurance companies tactics of delay in claims handling are many and varied, and we see them being promoted by the insurance companies at all levels .These issues may arise at the very start of the claim, where the insurance company will only take written notification of a potential claim. Their response to this written notification may take days and once the response occurs it may take the form of a telephone call introducing the fact that somebody will investigate the claim in due course.
If the loss adjuster is appointed it may take a further number of days for their visit to the property in order to progress the claim. Concerns may arise, which are investigated further in writing, and no monies are forthcoming until suitable answers are produced and accepted by the insurance company. The queries raised may go back years to the proposal form, or even prior to that, where earlier claims may have occurred. This situation can become more difficult, if the claims in the past were made against other insurance companies and records have been lost on or destroyed.
We are seeing in the current market tactical delays, such as reports to the insurance companies being lost or mislaid and requiring resubmission, which again adds to the time taken to release cheques in payment of the claim. Misrepresentation or Nondisclosure are two issues affecting proposal forms to insurance companies that are generating significant scrutiny in the current market. The loss adjuster carrying out these investigations contrary to what we are being told by the insurance industry has no authority to make decisions in relation to the information gleaned. The loss adjusters, in fairness to them in the past would have made recommendations and guided their principles in relation to issues that they were investigating, if these guidelines were seen to be helpful and speeding up the claim process. This helpful approach now appears to have been consigned to history
We are seeing a much greater depth of investigation. In most cases now, and this is particularly onerous, where losses may be substantial or if the cause of the problem is unclear or where there may be a history of claims. All of these situations will create a position where there is greater investigation, both by the loss adjusters and possibly the Gardai. This contributes to a much slower claim process.
The insurance company bring in their own forensic investigators, private investigators and other specialists, but if the scene of the fire has attracted the attention of the Gardai, the insurance company will then wait until any police investigation is concluded or at least well advanced before committing to accepting liability. Again, this can be a significant delay adding weeks or even months to progression of the claim.
Despite all the technology available today, including e-mail, fax, text, voicemail and document transfer systems, or even hand-delivery of documents. These delays continue in the general insurance market in Ireland. If the insurance company or the person dealing with a claim does not wish to progress the claim or even be helpful in progressing the discussions and negotiations of the claim, there is very little that a claimant can do about this.
We would ask the insurers to get involved in this discussion and openly comment on this topic on this blog. We will happily post any replies, suggestions or advice that you may have for policy holders and claimants here.
We will discuss the options available to unfortunate claimants in relation to dealing with the issues raised here in future blogs.