Be hon­est with your in­surer

GOLDEN RULES

Auckland City Harbour News - - NEWS -

When Kevin (not his real name) took out life and in­come pro­tec­tion in­sur­ance, he was 6’’1’ and weighed 72 kilo­grams.

A month later, he suf­fered a heart at­tack.

When the in­surer in­ves­ti­gated, the man turned out to be 5’’8’ and weighed 122kg.

Nat­u­rally enough, Kevin’s claim was turned down. That’s a true Kiwi story. But rather than laugh, or en­ter­tain a sus­pi­cion the man was rein­vent­ing him­self as the rein­car­na­tion of Ado­nis to get lower pre­mi­ums, take a moment to con­sider the les­son for us all in this tale.

The No 1 rea­son in­sur­ance claims are turned down is nondis­clo­sure.

Non-dis­clo­sure is jar­gon for not telling an in­surer some­thing it con­sid­ers im­por­tant when ap­ply­ing for in­sur­ance.

In this case Kevin failed to ac­cu­rately dis­close his lessthan-Greek vi­tal statis­tics. It could just have eas­ily been for­get­ting to men­tion can­cer in the fam­ily, a heart flut­ter three years’ back, or un­der­es­ti­mat­ing the vol­ume of booze knocked back each week.

There are two prin­ci­ples to fill­ing in in­sur­ance forms.

Be hon­est and ‘‘When in doubt, find out’’. Years ago I was told one belt-and-braces trick was to at­tach a copy of your med­i­cal notes to any per­sonal in­sur­ance ap­pli­ca­tion.

Then, the ar­gu­ment goes, the in­surer will never be able to say you failed to dis­close any­thing.

Re­cently, I found my­self ap­ply­ing for in­sur­ance and de­cided to check my notes.

So I called my doc­tor’s surgery.

Some odd mo­ments fol­lowed, pro­vid­ing an­other morsel of proof to my the­ory that no­body re­ally knows what the Pri­vacy Act says. First, a lovely ad­min­is­tra­tor told me I couldn’t have them be­cause they were cov­ered by the Pri­vacy Act.

When we had got past that one, I was told the in­sur­ance com­pany was the one who had to ap­ply for them.

Bless her, the ad­min­is­tra­tor was con­cerned I might be plan­ning to rort my in­surer and warned me in a friendly fash­ion to be hon­est.

The next claim was that my doc­tor would have to sign off the re­lease. I guess hand­ing med­i­cal in­for­ma­tion to a non­med­i­cally trained in­di­vid­ual presents all kinds of pos­si­bil­i­ties for mis­un­der­stand­ing, so I let the is­sue slide.

A cou­ple of days later, I had them, and the up­shot was, though I had put on weight, I had not for­got­ten any­thing.

But it gave me food for thought. I’ve heard of er­rors in med­i­cal notes mak­ing claims tricky, es­pe­cially the ca­sual use of words like ‘‘stress’’ or ‘‘de­pres­sion’’, so get­ting a copy gives you the chance to get mis­takes cor­rected.

My notes had no er­rors but did con­tain an es­ti­mate of the booze I con­sume each week.

Should that have been dif­fer­ent to the es­ti­mate I gave on the in­sur­ance form – an easy mis­take to make – I might have ex­pected my in­surer to start ask­ing ques­tions should a big claim re­sult, es­pe­cially were I to die or be se­ri­ously in­jured while un­der the in­flu­ence of booze.

Such in­con­sis­ten­cies could lead to an in­surer de­cid­ing a per­son had not acted in ‘‘ut­most good faith’’ when ap­ply­ing for cover, de­clin­ing their claim and tear­ing up their con­tract.

I didn’t end up at­tach­ing my notes, but I know that at claims time, the in­surer will check them, even if it did not when grant­ing me cover.

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