Why Don't You Just Pay me!

It can be incredibly frustrating for a person who has insurance cover to be told by the insurance company that they will not make any payments and even worse if payments have been made, that they want the money back.nnIn the insurance age cover is now compulsory for people and organisations to obtain in certain areas of life, such as driving a car or home contents. Employers too need insurance such as employers' liability compulsory insurance. This protects businesses against claims from employees for accidents or sickness they may suffer as a result of working for a business. Businesses in certain professions - such as the law, accountancy and financial service - are also legally required to take out professional indemnity insurance. This protects against legal liability for losses suffered by customers as a result of negligence. And in some cases insurance is obtained for other matters such as in the event of the need for medical treatment or illness.nnNot surprising when applications for insurance payouts are made and refused or avoided people, employers and businesses get angry and wonder what’s the point of obtaining insurance cover and paying the expensive premium. This brief article explains why insurance companies refuse to payout what can be done about it? nnWhy insurance company’s refuse to pay OUT?nnThere are many reasons that can be given by an insurance company refusing to payout.nnFirstly, at present people can lose out when they make innocent errors on proposal forms which area seen as "non-disclosure" of something that affects the insurers' risk assessment, or "misrepresentation" where the person makes an incorrect statement of "a fact that is material". A failure in either area can mean refusal to pay a claim.nnWhat really upsets people is that they do not realise they have a duty to disclose information they have never been asked for, but which could influence an insurance company’s judgment of the risk and when the person has acted they have acted honestly and reasonably. The question may be unclear or outside their knowledge.nnFor example when a person obtains income protection insurance and she was asked a number of medical questions. When she later developed multiple sclerosis, the insurer refused to pay as she had not reported a numbness in her leg diagnosed as a virus. In that case the ombudsman reversed this as she had answered questions honestlynnSecondly, Insurance companies can also refuse to pay out even if the errors or omissions would have had no effect on the policy or the premium, if they had been revealed earlier.nnFor example where a widower claims life insurance policy follwing a fatal road traffic accident but the insurance company refuses to pay out because the applicant had not mentioned that they were a smoker on the application process but was later discovered in medical notes. In such a situation the insurance company should still pay out.n nThirdly, in extreme cases insurances companies refuse to pay out because of allegations of fraud and exaggerated claims.nnGetting the cover right!nnWhen a person applies for the various insurance covers they should provide as much information to the insurance company as possible answering all the questions in as much detail on the proposal form or by telephone..nnRemember that even on a renewal application if there has been any changes such as road traffic convictions in respect of car insurance or illness in respect of health insurance these should be mentioned in the renewal form. nnThe insurance company should have no excuse of refusing to pay out for non-disclosurennIf a person has been involved in a road traffic accident it will be important to take photographs, report it to the police and be identify any witnesses. A prompt report of the accident providing all the details will help for an easy claim nnWhere an employee has been involved in a workplace accident the employer should write down important for people to record the claim in writing and even taking photographsnnThe insurance company should have no excuse of refusing to pay out because they say the claim is fraudulent.nnGetting evennnIf an insurance company denies a claim there are a number of options. nnFirstly, most insurance companies allow you to appeal a rejection. There's a grievance process in place. Perhaps all a person has to do is provide additional documentation, clear-up some misunderstanding and the claim is paid. nnIf you feel you have a grievance with an insurer you should report it as a complaint to the ombudsman. This could avoid costly litigation.nHowever, if believe your claim should be covered under your policy, you could take your case to a Solicitor to pursue this for you and if it comes to this, people even bring these cases to court. You could actually sue your insurer for the coverage you think you are owed under the policy. n