How insurers check up on you

Insurers need to verify the information you provide when you take out a policy and when you claim. reports on how they obtain additional information and whether they need your consent to do so.

Many people believe that insurance companies sign us up at the slightest opportunity, take our premiums without compunction, and then look for any excuse to avoid paying out when we claim. And they do this by secretively delving into our past or scouring the scene of our loss for tell-tale signs that we are being dishonest.

We’ve all heard horror stories, and although some may be true, this negative perception of the industry is largely the stuff of urban legend. On the whole, insurance companies pay claims without much fuss.

Maria Philippides, a director at law firm Norton Rose Fulbright who specialises in insurance law, says insurers (both short-term ones that insure property and long-term ones that insure people’s lives) are in the business of paying claims, and will not go out of their way to avoid paying them.

“Insurers don’t generally cross the line and infringe your privacy rights, or do things in a ‘sneaky’ way – they have their reputations to uphold,” she says.

Insurance is based on trust. Policyholders who intentionally make fraudulent or inflated claims abuse that trust, which makes claiming just a little more difficult for honest policyholders.

Philippides says it is in your interests as a policyholder that fraudulent claims are not paid out, because that would push up your premiums.

So, like it or not, insurers need to gather information about you and verify that information, both when you apply for cover and when you claim. They have the following avenues open to them for doing that: • The primary source of information is what you tell your insurer, both on your application form (or during the telephone discussion in the case of a call-centre application) when you take out cover and on the claim-form questionnaire when you submit a claim.

Philippides says the questions on the claim form may encompass issues that go beyond the claim itself. Your answers to these questions are compared with what is on record from when you took out the policy. The facts should match. •

Information you provide. Information domain. in the public

Philippides says you would probably be surprised by how much information about you is in the public domain. Deeds Office records of property ownership, details of directors of companies and police records are some sources. But there’s also what’s out there on the internet, which insurers may use to corroborate the information you have provided. As an extreme example, if, soon after a policyholder submits a disability claim, the insurer comes across a Facebook picture of the policyholder skiing in the Alps, it is certain to investigate further.

Philippides says that although your insurer may not have direct access to your social media accounts, and although you may restrict your posts to a private circle of friends, you have little control over your posts. Your friends may forward a post to their friends, and, before you know it, it is available for all to see. •

Private information accessed with your consent.

Your medical and banking records are confidential and may be accessed only with your consent, Philippides says. The terms and conditions of your policy may include a clause stating that the insurer has the right to ask you for access to these records. In the case of medical and bank records, you do not sign away your right of consent when you take out the policy, she says, but you may be asked to provide consent at claims stage. If you don’t, it may raise suspicions, and if the insurer has a strong enough case, it could obtain a court order to access your records.

Your credit history, which is also private information, is usually required upfront, when you take out a policy. Insurers will typically require you to disclose any adverse entries on your credit record before agreeing to cover you. The insurer will use your credit information