We were very interested, and also alarmed, to read the article on page ten of last week's Insurance Times (September 6): “AXA admits to error on motor policies”.
There are 14 major items listed in the “changes to your policy” leaflet. Point four mentions a scale increase in the event of one claim, but you need to read page 17 of the policy wording to see that two claims in the previous year wipe out all the bonus, if unprotected.
Fortunately, we don't consider an unprotected bonus policy worth quoting for, when a protected one is available.
Point five states that three claims in three years also reduces the protected bonus to nil.
Unless we have missed something, pages 17 and 18 of the policy wording appear to ignore the possibility that claims could be non-fault. The general conditions state that cover may be affected if a window or sunroof is left open. Dog lovers may not be too keen on that proviso and may also want to leave part of a security device inoperable, for example ultra-sonics.
Bearing in mind that we don't live in a perfect world, how certain can we be that all information from insurers is passed on to the policyholder and that they understand, or for that matter even read, what they have been sent? The old phrase leading a horse to water springs to mind.
Hopefully, AXA's product team will soon get to grips with its awful product information and its at times inaccurate rating structures. When substantial renewal increases are queried, Ipswich, or wherever we have been transferred to, says the capping system has failed and quote a reduced premium.
It is still possible with some software houses to quote the old-style Premier 35 contract for new business where all the existing policies are being converted to Conwy or the old Severn policy re-badged as Premier 35 bonus basis at renewal.
Hemming & Co
The nature of travel cover
Your leader declaring that no standard travel policies cover medical and repatriation costs (Insurance Times, 23 August) following war or terrorism is exactly the type of over-simplified, negative tabloid reporting you are warning against.
While the general conditions of most policies will contain a general exclusion for war events, I know of at least one travel policy which carries the following wording after the war exclusion: “This does not apply to medical and other expenses, hospital benefit or personal accident while you are away from the United Kingdom.” This means that, unless the Foreign Office declares Spain a war zone prior to the departure of an insured with a policy worded in this way, they would be insured for medical and repatriation expenses following a bomb attack.
It is unlikely that the PR departments of insurance companies will make an industry-wide statement on this situation as there will be variations in policy wording and the way in which individual cases are dealt with.
This is the nature of the beast and it is not realistic for it to be any other way unless you argue for a state insurance system with no choice of policy wording.
You rightly highlight the ongoing problem of the haphazard service provided by travel insurers and travel insurance intermediaries, but this must once again be viewed in the context of the way policies are still being sold.
Travel insurance policies are long and complicated documents. It does not seem possible to me, even with the advent of General Insurance Standards Council (GISC) compliance visits etc, to expect the staff in Boots, Tesco or the Post Office to run through several pages of small print.
Likewise, tour operators and travel agents have enough to do explaining the details of flight times and transfer arrangements to realistically hold the attention of their client for long enough to ensure adequate time is spent on insurance matters.
Travel insurance should be sold separately from any other service (or grocery product) and by qualified insurance staff. Until this is the case, travel insurance will always be a source of work for the Financial Services Ombudsman (FSO) and the tabloids. The FSO wants insurance companies to fully explain small print. Trained brokers and intermediaries are best placed to do this but, even then, time restraints placed on call centre or high street office staff, as well as the many and varied demands of clients in a rush to arrange their insurance during their lunch hour, mean the opportunities to fully explain small print are often taken out of the insurer's hands.
Insurance policies cannot cover any and every possibility, and have never done so. It seems amazing to me that the press and, to a lesser extent, the general public, are naive enough to expect otherwise. It all comes down to communication, a skill the insurance industry has been slow to develop.
Buying an insurance policy should never be a matter of “trusting to luck” as you state in your leader. And just because a policy excludes something does not make it a bad choice, particularly if it is standard market practice.
Insurers have a duty to make full information available and explain the terms and conditions. What form this explanation must take is unclear – should it be simply a copy of the policy wording, or a full word-by-word break-down?
I doubt many insurers, brokers or intermediaries have ever raised the question of terrorism when selling a travel policy (this would be different if the point in question related to office insurance in Belfast).
It is often as much as can be expected that issues relating to health and baggage exclusions are mentioned in the pre-purchase discussion.
Are you and the FSO saying that, as well as war, general conditions relating to ionising radiation, sonic boom, pressure waves and the like should also be discussed when selling insurance for a holiday?
RJ Dadson ACII
Snowcard Insurance Services
Would John Jackson like to check his comments regarding the consideration given by the Motor Insurers' Bureau (MIB) to “damage to property” claims that might be covered by the Untraced Drivers Agreement? It was always my understanding that, in relation
to untraced drivers, the MIB would only pay for injury to persons and not for damage to property, and a quick telephone call to the MIB confirmed this was correct.
The Lansdown Brokerage
Safety from Daleks
Everyone over 40 will remember the episode of Doctor Who when the eponymous Timelord was being chased by the Daleks across the dimensions of time and space. One focal point in their transit was the main deck of the Mary Celeste and, when the Daleks landed in pursuit, the entire crew went overboard to escape them.
This solution was elegant and of course true, but was also probably an uninsured peril at that time, not falling within current marine policies and possibly too far in advance of the creative use of business interruption or employers liability claims.
Who would insure me today against the arrival of Daleks or cybermen? What proof would be acceptable?
Full of spin
Imagine my surprise receiving my circular from Zurich Commercial confirming their “direct operation” will be run under the Eagle Star banner “to avoid confusion”.
This and all the other “commitments” in the letter are simply full of “spin”.
In the ten years I have been broking, we have built up very good relations with most offices and have no wish for these to change. I prefer to be told things exactly as they are, as I suspect do my other intermediary friends. Lets just get on with it.
I also fear that insurers entering the direct market for small commercial business using modern technology (and its huge upfront costs) as a means of acquisition will only serve to keep premiums down as premium is, of course, the over-riding factor when customers phone or surf direct.
I wonder what effect this will have on the ongoing losses and decreasing margins. We eagerly await results of the “Where's Lucky?” promotion, given the large investment involved and the market that was targeted.
Stephen Scott ACII
Woodside Insurance Services