Errors and inconsistencies in a situation should ring alarm bells. Waltham Pitglow outlines two case studies which require analysis

WRITING this week's CPD article, I am confronted with a range of responses to the competition. It will take a few days for the judges to look at the entries . The result will be published in the 31 October issue of Insurance Times with a commentary on the case study.

The response has been excellent and many readers I have spoken to have relished the activity of "thinking about something in some depth". That is a good outcome of a CPD exercise, so let us consider a couple more real- life case studies. This time the answers will be published next week.

I want readers to get used to the idea of spotting errors and inconsistencies in a situation. This, after all, is often how a competent practitioner can help a member of the public in organising their insurance affairs.

The errors and inconsistencies in each of these cases will fall into the following categories:

  • Technical

  • Insurance principles

  • Regulation.

    The first concerns an account of a motor claim from a member of the public:

    I insured my car with the XYZ insurance company on a fully comprehensive basis and selected a voluntary £150 excess. This was in addition to a compulsory £200 excess for accidental damage and there was no compulsory excess for theft of the vehicle.

    The company was slightly more expensive, but the agent emphasised that in the event of a claim I would be provided with a similar car free of charge until my vehicle was repaired or returned to me. I did like this benefit as I drive a fairly expensive car and hate driving round in 1100cc Corsa's.

    I was in Leeds staying at a hotel (about 400 miles from home) when, at about 1am, I was awoken by the hotel manager to say that a guest had interrupted a group of young people breaking into the car.

    They had jemmied open the driver's door and ripped out the steering column lock tumbler.

    They were trying to hot-wire the car when interrupted. The damage was substantial and the car was not driveable. Having rung the police I rang the RAC who ferried the car back to the main dealers in my home town. I carried on with my lecture tour. When I rang the insurer the next morning I was advised that I could not take advantage of the hire car facility, as the terms of the policy were that I had to send the car to an approved agent.

    As I had sent it to a main dealer there was no cover. Two weeks later, the car was repaired and I was left with a bill for £600 in hire charges (you 1100cc Corsa).

    After deducting the £350 excess - which I paid - and collected the car, I wrote to the insurer expressing my dissatisfaction about the way I had been treated over the hire car matter, particularly as it was at 1am in the middle of nowhere. I have not heard a word from them about the matter."

    Remember that a member of the public knows nothing about insurance. It is now your job to list at least three things in this account that point to incompetence or non-compliance (or just plain meanness) on the part of the insurer.

    Case study
    Case study two is slightly different. This time you will see a series of statements and you will have to consider whether they are true or false.

  • I lent some hi-fi equipment - an amplifier, a preamplifier and a CD recorder - to my son at university. He lives in a flat and I made sure that the security was equivalent to the standard required at home by my contents insurer. A burglar broke into the flat and stole the equipment.

  • I asked a panel of insurance specialists whether the loss was covered under my own household policy, which was a comprehensive all risks policy. These were there answers:

  • Yes, because I have a world-wide all risks section for personal possessions

  • No, because personal possessions are items that can be carried about the person and 40kg of hi-fi does not fit that description

  • If my son had been in halls, it would have been covered, as he would still be classed as a member of my family, but as he was in his own accommodation - no.

  • No - if you lend something to someone else they are legally responsible for the item and should insure it themselves.

  • No - I have a duty to minimise the risk of loss and lending £500 worth of hi-fi equipment to a 19-year-old student is reckless

  • Yes - it is covered under the item covering goods temporarily removed from the premises.

    The task is to answer true or false with an explanation of why you have given that answer.

    Insurance panel
    Believe it or not I lied about the panel of practitioners. The truth is that these were all answers given by the same insurance company about the same claim. Frightening isn't it? Both of these situations occurred in 2002.

    The learning point is a simple one if you are a practitioner. There is no way in this world that you can help a member of the public, unless you are competent to address these issues. If an insurer has incompetent people dealing with claims, it will get away with it, unless you are on the ball and up to date with your own knowledge and understanding.

    For those readers who are responsible for supervising the assessment of competence in a firm there is an additional learning point here in how you can turn a real situation into a learning and assessment tool.

    Remember the concepts: errors and inconsistencies and true and false. You can add these to your multiple choice and other methods of checking on knowledge and understanding.

    Answers next week

  • Waltham Pitglow is an insurance investigator specialising in compliance.

  • This page is edited by RW Associates, specialists in training, complianc e and competence. Email to: .

    Using this CPD page
    For the vast majority of practitioners and indeed support and supervisory staff in our industry, CPD is about regular learning and study that is planned, recorded, timed and evaluated.

    If you are a member of a professional body with a CPD requirement then there will be certain rules regarding the quality and nature of study material, and the way in which it is recorded. For staff of GISC members this means recording on your individual training file what the learning was, who provided it and when.

    It might be structured, such as a course, a learning programme or exam study. But it can be unstructured. This form of study encompasses reading the trade press, technical material or taking part in activities to support your professional body.

    Some CPD requirements are points related (a little antiquated) and others require a time value to be allocated.

    For example, it might take one hour to read Insurance Times each week. Most of that could be put as a time value but, in reality, perhaps only an half hour was devoted to learning something. The rule is to be honest with yourself and record the time that is relevant.

    Always take time to make a note of what you felt you gained from the activity. This is useful information for anyone else considering the same activity.

    In response to the popularity of our CPD programme each week's CPD page can now be downloaded from our website.

    We will be preparing a binder for you to keep these in alongside the results of the exercises.

    To download a PDF of this article as it appears in the magazine click here .

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