If you live in Britain, you might wonder why so many insurers now refuse to pay out insurance claims. It is, after all, part of the contract between the insurer and the insured, right? The answer is yes.
It is still illegal for an insurer to refuse payment on a legitimate claim. However, the insurer is entitled to question the legitimacy of the claim before a payment is made. Nowadays, insurers make a much greater effort to ensure that a claim is completely legitimate. If you think it is not necessary, you may need to rethink.
Increased cost and amount of payout payments
The insurance industry, like everyone else, has been strongly influenced by the deteriorating global economy. All aspects of the payment of claims have now become very costly. Medical treatments, funeral expenses and legal fees have increased. Administrative expenses have also risen.
Due to the number of natural disasters recently, global demand for building materials has also increased drastically. In addition, many companies have closed due to the bad economy and climate change, which creates a lack of certain materials and services. This means that the costs of insurance companies for repairs and property change have increased drastically.
Due to the bad economy, insurance companies have reduced their investments in equities and other risky money projects. They must raise their prizes to stay on business. This increase in premiums makes insurance less appealing to consumers, so insurers now have to pay an increasing amount of receivables at ever higher costs with less money coming in.
How insurance fraud affects credit payments
There have always been some forms of insurance fraud previously. For example, people lose damage to receive compensation from the insurance companies concerned. Or perhaps deceit meant a healthcare professional who provided an insurance company for a medical treatment that was never provided. Sometimes people would argue that something disappeared or stolen when it really was not.
But the poor economy now also affects all consumers. People who would never consider cheating insurance companies earlier commit deliberately fraud. These people are not hardened criminals. They are just average citizens, trying to find ways to finance their insurance premiums. However, this increase in fraud has caused at least 30 increase in claims denied by insurers.
Basic requirements are rejected
According to major insurers, the main reasons for their claim for refusal are because the insured does one of the following:
Do not reveal beliefs
Fronting someone else by misleading the insurers about who is the main driver
Do not reveal any previous requirements
Do not indicate changes made in a vehicle
Do not enter the true address where a car is kept
It does not reveal the real value of property
Provides false documentation or false information
Not disclosure of changes to infrastructure
Applying for services was performed by a qualified or certified professional service when it was not
Disclosure of previously existing terms
Falsification of information on the causes of accidents or causes of damage or loss of property
In the views of consumers who commit this type of fraud, they do not harm anyone. They believe that insurance companies should pay the claims anyway. However, it has been estimated that this kind of fraud now adds about £ 30 for each private car insurance in the UK.
These fraud damages insurers and other policyholders. They hurt themselves too. When an insurer refuses his claims, the fraud must pay the full cost of the claim from his own pocket. In addition, the insurer is likely to cancel the insurance, making it even more difficult and more expensive for the fraud to get new insurance cover.
In addition, fraud is not limited to just engine protection, it is found among all types of insurance located in the UK. This means that every honest consumer must subsidize fraud through his own increased premiums with all the insurance coverage they have. Thus, all citizens in the UK are being injured by these economically driven fraud.