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Insurance

Introduction

None of us likes paying out for insurance cover. All we end up with is a piece of paper which we hope we will never be unfortunate enough to have to use. However, no matter how careful we are, things do get stolen, accidents do happen and people do get sick. And suddenly, that little piece of paper becomes very important.

What the law says

Insurance companies, brokers and agents all provide a service and they must do so with reasonable skill and care. An insurance policy is a contract and if the company breaks their promise, they can be sued for breach of contract.

Useful information

As burglaries cause extreme distress, it makes sense to have the contents of your home fully insured. Some people take out home contents insurance when they first move in and then forget about things that they buy later on. So check every so often that you are insured for the full value. lf you're not, and have to claim, the insurance company may do something which they call 'averaging' and only pay part of the value of any stolen items. Check also whether your policy gives you 'new for old' or only 'indemnity' cover. Many insurers now offer 'new for old' as standard. This means that you can buy a brand new replacement whereas 'indemnity' cover means the insurance company will only pay you the value of the stolen item. This will be its cost when new, less an amount because of its age and wear and tear. If you're taking out any type of insurance, for example life assurance, you must answer truthfully and fully any questions which you are asked. You must also tell the insurance company about anything else which might have a bearing on their decision to insure you or on the amount of the payments you have to make. Hobbies such as motor bike racing or rock climbing are two obvious examples. If you don't declare these, and you are killed (say) during a motor bike race, the company may not pay out. The Motor Insurers Bureau will help you if you were injured or had your car damaged by an uninsured driver. Their address and phone number are shown overleaf. Make sure your holiday insurance is good enough. Some policies only cover expenses for accidents causing (actual) loss of limbs or eyes. Other long term medical treatment is not covered. Some experts say you should have cover of at least £1 million for Europe and £2 million for anywhere else.

What to do if you have a complaint

If your complaint is about a broker who is a member of the British Insurance Brokers' Association, ask them to help. Their contact details are shown below. If your complaint is about a company, you should first give it the chance to put the things right. Then, if you're still unhappy, write to the Financial Ombudsman Service who investigates complaints about most companies. The address is shown below. If, despite all your efforts you still haven't been able to sort out your complaint, you may have to think about court action. If the amount involved is not more than £2,000, you can take your case yourself to the Small Claims Court. Talk to your local Advice Centre or Citizens Advice about this before you ask your local court for an application form. For larger amounts, you should talk to a solicitor.

From category: Money Matters