Insurance: Avoid companies that collect premiums quickly but are slow to pay claims
To be fair, the refusal/inability of companies to meet financial obligations is not a problem unique to insurance companies. All organizations are rightly more focused on generating revenue, but some are reluctant when asked to deliver on promises to their customers that involve financial outlay.
I recently ran an experiment with my mobile phone provider. As my contract was coming to an end after a period of two years, I contacted them and, as usual, followed the steps indicated by the answering machine. Surprisingly, after waiting 20 minutes to speak to the staff, I was logged out. This happened twice, so when I called a third time, I opted for the link to sales unit staff option and was instantly connected to a staff member. Of course, when it became clear to the staff that I was not looking for a new contract, they transferred me to the cancellation team and I continued to wait.
Without exception, every country where insurance companies operate will have some unscrupulous operators who are no better than the common scammer on the street who uses dishonest methods to trick people into parting with their money. Although I have praised insurance companies in previous posts, the feedback I have received along with some personal experiences has led me to accept that there are insurance companies operating today that should be closely monitored by authorities.
Even the so-called insurance hub, London, has its share of insurance companies using specially trained staff backed by fancy TV ads and publications to persuade unsuspecting members of the public to hand over money in exchange for poorly worded insurance contracts.
How to spot corrupt insurance companies
Premium
We’re all bargain-hungry and most rush to comparison sites for quotes. Unfortunately, these sites rank insurance company quotes based on price, with the cheapest ranking the highest. As with most goods and services, the cheapest is not always the best. This is especially true for insurance because it involves the pooling of funds in which each insured is expected to contribute to the reserve, with a premium proportional to the risk it presents.
So when the (premium) price seems too good to be true, avoid. When an insurance company undercuts the competition by quoting a ridiculously low premium, it follows that in the event of a claim, that company may not have sufficient funds to meet its obligation after making a provision for overhead.
reviews
One great advantage of the Internet is that people can post reviews of products and services that detail their experiences. The reviews are also available online to companies with the companies’ customer rating services. Most of us already read reviews of most products and services before buying them and therefore we should extend this practice.
I usually search the web for as many customer reviews of a company as possible, as some of these companies with the help of their IT staff try to counter negative reviews by posting fake reviews.
References
Similar to the highlights on previous reviews. The traditional way of deciding whether to patronize a business that offers a service is often to ask friends and family for input. We often extend the consultation to professionals with whom we have had contact and trust/value their advice.
company annual report
For those comfortable with numbers, the traditional method of reviewing a company’s health is the annual report, which is a comprehensive report of the company’s activities for the past year.
With a few clicks these reports could be accessed on the web offering access to useful information such as the company’s balance sheet, its profit and loss statement and cash flow, as well as useful notes to help understand the financial statements.
Opt for legal coverage extras
This is particularly useful when you need to pursue an unsecured loss. Insurers are more likely to accept a claim that falls within the scope of your policy if it is filed through a lawyer because prolonging such claims costs them much more in legal fees if they ultimately lose the case.
However, if you find that you are no match for the power of insurance companies but must invest in insurance anyway, you may want to seek the services of an insurance broker.
