Is insurance there when you need them?

[Nik]

If one reads The Rainmaker of Grisham or hear people in different places, the biz ethics in insurance might differ. In some places people are generally satisfied and experience little problem in case of occurrence of covered events, while in some others - complain that they eagerly sell policies, promising a lot, but ditch people just when they are required to put the money where their mouth is. Sometimes a multi -million loss of satellite due to carrier explosion, for example, may be more speedily processed and compensated than an incomparably smaller claim of an individual.
What's your experience? What do you hear in your place?

[Nik]

Insurance premiums amount to a sizable percent of the GDP in developed countries: https://stats.oecd.org/Index.aspx?Que...
10% in the US, almost 20% in the UK, 23 in Ireland. These mean trillions of dollars.
I'm surprised there are so many comments here -:)
And should we insure the hikers? -:)

[Marie]

Looks to me like nobody wants to discuss this subject, Nik! lol :)

I will discuss it with you as I am always up to stating my opinion! :)

Here in the U.S. insurance covers just about everything. There are so many different kinds of insurance that it is mind boggling! They even have insurance for pets! But I am not even going to touch that subject. lol :)

Here is just the tip of the iceberg on what kind of insurance you can get here in the U.S.

House insurance - this is an iffy insurance with some companies as they have so many guidelines about what they will pay out if something happens to your house. Now in some places where people live along the coast they will have hurricane insurance and if a hurricane comes along sometimes they can cash in on their insurance, but again it all depends on the company.

Auto insurance - this does work in most cases, but if there is a car accident, the insurance company will only pay for the damage to the car. Usually if you are not at fault and it was the fault of the other person, their insurance is the one that pays out. If you are at fault, then your insurance would go up as then you are considered a risk. Normally people don't get actual money from being in an accident as the insurance money goes to fixing the car only. Now the only time it gets sticky is if someone decides to sue the other person or there is a fatality involved, then that opens up a whole new can of beans!

Life Insurance - this only works if someone has been paying for the insurance and then if that person dies, the spouse or claimant gets the money, but that also depends on how much the person was paying into the insurance company too.

So there are so many different scenarios about insurance and so many companies that have their own guidelines about what they pay out and what they don't. When getting insurance for anything, everyone should read the "fine print" as that is where all the information lies, but not many people do that and they just sign the documents not realizing what they are signing. So then when something happens and they try to claim the money, insurance companies don't want to pay out as they go by what the person signed.

[Ian]

Marie wrote: "When getting insurance for anything, everyone should read the "fine print" as that is where all the information lies, but not many people do that and they just sign the documents not realizing what they are signing."

There's a reason for that. The fine print is usually tens of pages of dense legalese that the average person hasn't a hope of understanding. The words look like English, but their meaning is only clear to another insurance professional, until you try to make a claim and then they'll helpfully explain that that string of nonsense words actually means, via roundabout definitions and cross-references to half a dozen other parts of the policy, that the policy doesn't cover the situation you're in. Or that the one word "notwithstanding" on page fifty-seven completely nullifies the cover that you thought you were getting that was splashed in bold face type on the front page of the policy.

And, to Nik's point earlier, the multi-million loss of a satellite is settled quickly because if you can afford a multi-million dollar satellite you can also afford a team of expensive lawyers to make sure the policy covers what you need. That's an advantage the average person can't afford.

You have to remember that the business of insurance is no longer about protecting the policy-holders from crippling loss, it's now primarily about making profits for the insurance company.

[Nik]

Marie wrote: "Looks to me like nobody wants to discuss this subject, Nik! lol :)

I will discuss it with you as I am always up to stating my opinion! :)
..."

Thanks & hope more folks will join-:)

[Nik]

Ian wrote: "Or that the one word "notwithstanding" on page fifty-seven completely nullifies the cover that you thought you were getting that was splashed in bold face type on the front page of the policy. ..."

Made me smile. I liked that description! -:)
But wouldn't regulations bind insurance companies to state concisely and clearly what they cover and what the exceptions are? And wouldn't it border false advertising, which is frequently covered by laws, and stuff like that?

[Ian]

Nik wrote: "But wouldn't regulations bind insurance companies to state concisely and clearly what they cover and what the exceptions are? And wouldn't it border false advertising, which is frequently covered by laws, and stuff like that?"

I certainly regard it as false advertising, but the thing is it's all laid out in black and white in the fine print, so they can say it's all out in the open. And it technically is, as long as you're a lawyer.

[Ian]

The additional problem as I see it is that one of the "outs" is you did not disclose a relevant fact. The problem is, the company defines "relevant" later. In fairness to the companies, a lot of claims are riddled with exaggeration, if not fraud.

[Graeme]

I hit up my insurance company for $60K AUD of life saving surgery in 2013.

Call me a satisfied customer.

[Nik]

Ian wrote: "The additional problem as I see it is that one of the "outs" is you did not disclose a relevant fact. The problem is, the company defines "relevant" later. In fairness to the companies, a lot of cl..."

So sometimes it's a game who hoodwinks whom? -:)

[Nik]

Graeme wrote: "I hit up my insurance company for $60K AUD of life saving surgery in 2013.

Call me a satisfied customer."

For you it was there!

[Ian]

Actually, in fairness I have to say my medical insurance has done OK by me - a titanium hip and a hernia repair (separate events) and there were no quibbles

[Anne]

Nik wrote: "Insurance premiums amount to a sizable percent of the GDP in developed countries: https://stats.oecd.org/Index.aspx?Que...
10% in the US, almost 20% in the UK, 23 in Ireland. These mean tril..."
My 4 year old car has a 7 year warranty by Kia. Just had to replace the hydraulic clutch due to wear and tear even though low mileage and non aggressive driving. Guess what, the warranty didn't cover it. Disallusioned. So it's not insurance but similar.

[Ian]

I don't think a warranty is the same as insurance. With insurance you pay an annual premium; with a warranty it is merely an assurance by the manufacturer that all will be well. Or in Anne's case, they do not assure everything. You have to look at the legal terms of the warranty, but there will always be some items not covered. Nobody in their right mind would cover things like points, plugs, or brake pads for seven years. Clutch plates are probably excluded because some drivers don't keep their feet clear of the clutch and burn up the plates too quickly, especially if they do a lot of complicated reversing. Not saying you did, Anne, but it is the sort of thing that if it really does go because it is deficient, you can never prove it was the deficiency, not you.

[Nik]

A warranty is similar to insurance in that it's a written obligation to cover certain events.
Maybe one thing is to refer to exemptions or definitions in the policy or warranty and another is to renege on undertaken obligations. In The Rainmaker Grisham gives the latter example.

[Ian]

The warranty is supposed to be legally binding, but they often have some weasel clauses. In NZ there is something called the consumer's guarantee act in which any good being sold has to be "fit for purpose" for a certain length of time, that sometimes exceeds a warranty. If it doesn't function as stated when sold, for whatever reason, it has to be fixed, replaced, or all money fully refunded.

[Philip]

Ian wrote: "The warranty is supposed to be legally binding, but they often have some weasel clauses. In NZ there is something called the consumer's guarantee act in which any good being sold has to be "fit for..."

Same in UK

My experience has varied. I once had income insurance as a contractor. When I needed it it would not pay out. Legalise and small print screwed me. On the other hand just had some appliances replaced that have broken under their warranties and that was no quibble. Have also used the fit for purpose to get stuff fixed after threatening legal action in small claims court.

When living in USA won out of court settlement for insurance that did not cover what they said in the state I was in. For insurance and companies you have to be prepared to fight. But make sure you are right first.

[Nik]

Approximately one month after the expiry of a three year warranty, the engine (usually the most expensive part of the car) died. You can imagine how pissed I felt. Argued with the importer that expiry of the term while doing nothing about my complaints about engine's malfunctioning during the warranty period, didn't release them. In the end they assumed the liability

[Scout]

You covered yourself by complaining during the warranty period, Nik. Good on you. In general, I don't give much credence to warranties, and I certainly won't buy an extended warranty on a vehicle because there are so many exclusions.

Regarding health insurance, I agree with Ian's comment that "the business of insurance is . . . primarily about making profits for the insurance company." I've questioned many claim denials, and every one resulted in payment of the claim for health services. I think their default is denial because they know most people won't pursue it further. People like me are their nemeses :-)

[Nik]

Scout wrote: " I think their default is denial because they know most people won't pursue it further...."

Can be true - even if it works in 10% of cases, it's a huge economy