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Nuki&#39s Eye

It has been a while since the insurance industry suffered a sustained hammering for refusing to meet genuine insurance claims but it will not be long in coming.

The last great blitz on bent claims departments was sparked by the Sunday Times in the early 1990s when the newspaper came across an industry conference entitled, Denying Coverage in Insurance Claims II.

The gathering, held at the Park Lane Hotel in Mayfair, London, was designed to advise insurance industry executives on how to increase profits by refusing payments to policyholders.

On the Sunday before the conference, the newspaper splashed with the headline, The scandal of the insurers who love to say &#39no&#39.

The following day we were treated to the televised spectacle of dozens of underwriters and claims clerks dashing through the doors of the Park Lane Hotel with their faces covered like criminals entering the dock.

Over the following months, hundreds of policyholders wrote to newspapers, documentary makers, regulators and ombudsmen to complain about their treatmentat the hands of the insur-ance industry.

My favourite horror story ran under the headline:Q: When is a child&#39s gerbil not a pet? A: When an insurer says it is vermin. The story revolved round General Acci-dent refusing to compensatea family whose gerbils, Butt-erscotch and Ginger, had gnawed a £400 hole in a brand new sofa.

The family&#39s insurance policy covered “damage by pets” but the GA refused to pay on the grounds that gerbils -the country&#39s eighth mostpopular pet – were not pets at all but vermin

The GA case was hardly the most important in the history of insurance. It did, however, highlight a certain basic pettiness and dishonesty that has once again become widespread in the claims departments of Britain&#39s insurance companies. For most people, this attitude means that making a claim on an insurance policy today is always an uphill struggle.

I, for example, am owed about £300 by two travel insurance firms in respect of two separate claims that I gave up on after several months of correspondence.

Two months after sub- mitting a claim, for example,I would receive a letter something like this: “Thank you for providing the police report requested but our translator notes that it was signed by the Peruvian equivalent of a desk sergeant and not a station superintendent as the policy requires. Sorry for not drawing this to your attention sooner but if you forward us the appropriate document we will proceed with your claim….”

The industry justifies this sort of behaviour by ranting on about how many fraudulent claims they face. It has developed a self-serving culture in which every claimant is viewed as a potential fraudster. A claims department may have no evidence whatsoever that a claimant is up to no good but time and time again they delay or refuse claims just in case.

In many cases, the results are serious. Last weekend, The Mail on Sunday outlined the case of a man who had dared to claim on a critical-illness policy.

Without any reasonable grounds for suspicion, the insurer had sent a private investigator to interview him.

Most right-thinking people would view this as outrage enough but in this instance, allegedly, the sleuth was disguised as a nurse.

I also have a case on my desk of a man whose house burnt down while he was insured by Direct Line. The company has refused to payout because it suspects the claim is fraudulent.

It has no solid evidence for this and so is relying on obscure small print and lengthy legal procedures to avoidpaying out. In practical terms, Direct Line has turned natural justice on its head and asked its policyholder to prove his innocence.

The insurance industry&#39s favourite other line is to moan about how under-insured we are as a nation. I wonder, might the two problemsbe connected?

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