Height loss, weight gain foils claim
WHEN A man arranged his income protection insurance he told the insurer he was six foot, one inch tall and weighed 72kg. A month later he suffered a heart attack and made a claim.
A medical examination revealed he was five inches shorter and weighed 122kg.
The insurer declined the claim on the basis of a non-disclosure of the man’s correct height and weight, and the decision was upheld after the man complained to the Insurance Ombudsman.
The case is one of several that provide an insight into some of the errors people make that results in claims being turned down by insurance companies.
They also reveal how insurers will call in investigators to help them decide whether to pay a claim, or if they doubt a person’s truthfulness, and in certain cases they point to flaws in the process of selling insurance which results in insurers being able to pocket premiums, but later avoid claims.
Another man bought income protection from his bank, and later claimed when diagnosed with ‘‘Chronic Paranoid Schizophrenia’’. That slam-dunk of a claim was turned down by the bank insurer because the man had failed to disclose he sought treatment for chest and abdominal pain, earache and also iron deficiency in the previous two years.
A person applying for insurance has a common law duty to disclose to an insurer all information, which a prudent insurer would consider material, the ombudsman found. The way insurance is sold does not make it easy to always disclose every material medical detail the insurer needs to know, but regardless of that, it is the person taking out the policy’s duty to do so.
Another policyholder told an insurer his wife’s hearing aid had probably been stolen by a rat.
Another policyholder told an insurer his wife’s hearing aid had probably been stolen by a rat.
Several changes of story later, and an investigator was sent in by the insurer. He found lies had been told, and the policy was torn up and the woman entered onto a database of declined claims, which will make it hard, or at best costly, to get insurance elsewhere.
In two cases people let their children borrow their car. When crashes happened, in both cases, the insurer refused to pay the claim.
In the first the driver was on a restricted licence, driving with other people in the car, but without a suitably-qualified person in the car with her, leading to the insurer refusing to pay. The ombudsman agreed.
In the other, a young man crashed into a telephone pole while messing about. When asked why he pulled the handbrake up, he said he was ‘‘being silly and wanted to see what happened’’. When asked what the road conditions were like, he said ‘‘it was very slippery, it was icy and there was sleet on the road as well’’. The lad’s father tried to argue his son had not been reckless. Unsurprisingly, the ombudsman did not agree.
A woman died by falling down stairs, but her accident insurer didn’t pay up as it found she was drunk at the time she fell. She was found to be three times over the legal limit for driving. Under many policies, including the one the woman was insured under, death while under the influence of alcohol is excluded from claims.