Fairness be told, the problem of insurance companies refusing to honor financial obligations is not unique. While all organisations are rightly focused on revenue generation, some companies become reluctant to fulfill financial promises made to clients.
Recently, I did an experiment with my mobile phone provider. After a two-year contract, my contract was about to expire. I called them and followed the instructions of the automated answering machine. Surprisingly, after waiting 20 minutes to speak to a staff member, I was disconnected. When I called again, this happened twice. I chose the option that connected me to sales staff and was immediately connected. When it became obvious to staff that I wasn’t after a new contract, I was transferred to cancellation and waited.
In every country where insurance companies are allowed to operate, there will be some unscrupulous people who use dishonest methods and tricks to get people to part with their money. Although I had previously praised insurance companies, the feedback I received and a few personal experiences have made me accept that there are still insurance companies that exist today that the authorities should closely monitor.
Even London, the “hub of insurance”, has its fair share of insurance companies. They use highly trained staff supported by TV ads and publications to convince the public to part with their money for poorly written insurance contracts.
How to spot crooked insurance companies
Premium
We all crave bargains, so we are quick to go to comparison websites for quotes. Unfortunately, these sites rank insurance company quotes based on the price of the lowest priced. The cheapest price is not always the best, as with many goods and services. Insurance is no exception. It involves pooling funds, with each insured expected contribute to the pool.
If the premium (or price) seems too good to be true please don’t believe it. If an insurance company quotes a ridiculously low premium, it could mean that, in the event that a claim is filed, the company might not have enough funds to cover its obligations after taking into account overheads.
Reviews
The internet offers many advantages, including the ability to leave reviews about goods and services detailing their experience. Companies can also post reviews online through the customer rating services. We are all familiar with the practice of reading reviews before purchasing most products and services.
I often search the internet for customer reviews of companies. Some of these companies, with the help of their IT staff, attempt to counter negative reviews by posting fake reviews.
Referrals
Similar to the points made above about reviews. Asking friends and family for their opinions is a good way to decide whether you want to patronise a service provider. We often ask for the opinion of professionals with whom we have dealt and we trust their opinions.
Annual Report
The annual report, which provides a detailed report on the company’s activities over the previous year, is the best method to review a company’s standing.
These reports can be accessed online in a matter of seconds. They include useful information such as the balance sheet, profit and loss statements and cash flow statements. There are also helpful notes that will help you understand the financial statements.
Choosing legal coverage
This is especially useful if you have to pursue uninsured losses. Because they know that a solicitor can help them file a claim, insurers are more likely to honor it if the claim falls under their policy’s scope. If the case is lost, the lawyer will charge more legal fees.
If you feel that you are not up to the challenge of insurance companies, but you must still invest in insurance, an insurance broker may be a good option.
