When you mention insurance to someone, the reaction is seldom positive and for most people it’s seen as grudge buying – something they don’t want to spend money on and don’t think they’re likely to use.
In fact, 55 percent of consumers believe that insurance companies will always try to wriggle out of insurance claims, fueling their discontent with the industry.
However, the UK’s largest insurer, Aviva, says this is a myth and paid out 96 per cent of claims in 2017 across its retail and commercial customers.
Fifty-five percent of consumers believe that insurance companies will always try to find a way to not pay claims
She is now urging UK insurers to debunk this myth to prove that insurance pays if you have a valid claim.
When asked how many claims are paid each year, consumers say 52 percent, but the numbers from Aviva are much higher.
The equivalent number of paid claims was close to 1 million claims for Aviva customers, with 4% denied – or about 40,000 cases.
Whilst these figures are only from one insurer, with Aviva being the UK’s largest insurer, they are a good indication of how the others are behaving.
In the most recent data from the Association of British Insurers, for the period 2015-2016, 98 per cent of claims were paid for car insurance, 82 per cent for home insurance and 86 per cent for travel insurance. Of these, the average payments were £2,524, £3,000 and £906 respectively.
The insurance company also disclosed the most common reasons why they deny claims. The first was for customers who don’t have the right type of coverage when they file a claim, and don’t choose additional cover to their standard policy.
For example, for customers with a basic home insurance policy, if they don’t choose to include accidental damage to their contents—which would cost extra—they can’t claim it.
The next reason was to make a claim on something not mentioned in the policy, such as wet and dry mold in a home when these were not covered under the policy.
Aviva, the UK’s largest insurer, paid out 96 per cent of claims on average in 2017
Clients were also denied if the definition of the policy was not met, such as certain critical illness claims were denied because the condition the client was claiming for was not included in the policy.
Finally, the fourth was if no pre-existing requirement was declared during the application process.
The most common reasons for some of the claims are also listed. For home insurance for example, accidental damage accounted for 42 percent of claims, water leaks accounted for 24 percent, while burglary accounted for 14 percent and storm damage accounted for 9 percent.
When it comes to travel insurance, 33 per cent of claims were for a medical emergency, 28 per cent to cover cancellation for certain circumstances, 13 per cent for lost and stolen items, 6 per cent for travel delays and 4 per cent for assistance with Travel.
She also included details of her individual protection claims for life insurance, critical illness, and income protection policies.
Of these, the most common illness was cancer, in 62 percent of cases, heart attack in 9 percent, stroke in 6 percent, serious childhood illnesses in 5 percent, and multiple sclerosis in 4 percent.
For income protection, which was among the lowest in overall wage rates at 88.8 percent, mental health was the number one reason for filing a claim, at 28 percent, followed by musculoskeletal, at 16 percent, and cancer, at 9 percent. cent of customers.
The most common reasons for claims being denied in this area were clients who did not provide accurate data about their health and lifestyle when applying for a policy or a policy that did not cover the client’s condition.
How to make sure your insurance claim is not denied
There are a number of things you need to be aware of when purchasing an insurance policy, and making a claim, to ensure that your insurance company does not refuse you.
You may need to pay for additional coverage
Most home insurance policies do not provide standard accidental damage cover. This is usually an add-on that you need to pay for when you purchase the policy. Likewise, your property will not be covered if you take it out of the house, unless you add ‘personal property’ to your policy, which is usually around £30 a year.
Pre-existing conditions should always be declared
Depending on the type of insurance you purchase, you will need to tell your insurance company about any pre-existing conditions. This is especially important when it comes to travel and health insurance, as if you haven’t already declared the status, you won’t be able to claim it.
Check how much is excess before buying
Aviva says one of the main reasons car insurance claims are rejected is that the claim is less than the excess the customer needs to pay. If you set a high excess, it usually lowers your monthly costs, but you need to make sure you can afford it should you file a claim.
Always check the small print to see what’s covered
There are often important details about an insurance policy hidden in the small print, so you should always check that.
For example, the limit on valuables on a travel insurance policy may not be enough if you have to replace all the jewelry you take on vacation, as well as your camera and Kindle.
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