Claims handling ‘death by policy’
Some major insurers have been guilty of subjecting policy-holders to undue stress at claims time, according to Money Management columnist, Col Fullagar.
Writing in the latest print editon of Money Management, Fullgar said he is aware of "situations where the claims management process has given and continues to give rise to stress for the claimant that arguably far outstrips their financial loss.
He writes that this "claims management stress" has the potential to result in "death by policy".
Fullagar said the catalyst for him making the claims in his column came out of having two weekends in a row interrupted by clients making contact in various states of "meltdown" attributed by them to the actions of their insurer in managing their claims.
"Each was having thoughts of self-harm resulting in treating doctors being contacted. In each case, their despair was not without reason," he said.
"These incidents are not isolated. The extent to which the claims management process endangers the medical well-being of claimants and the frequency with which it occurs is unknown; quite simply because no serious investigation has taken place," Fullagar said.
He said the fact the claims management process could and hadend angered the medical wellbeing of some claimants was an unequivocal fact supported by adviser/claimant feedback and personal experience.
Fullagar said there were distinct stressors with respect to benefit payments such as irregularity of payment and incorrect payments.
He said other issues included unprofessional, erroneous and simply rude correspondence being sent to claimants and denial of claims "in a way that is perceived to be a means of forcing the claimant into litigation rather than a reflection of the merit of the insurer's position".
All these and many other issues can and do increase claimant stress to medically acknowledged dangerous levels," he said.
Fortnum Financial Group executive chairman, Ray Miles said that while his organisation would not have witnessed as many instances of such practices as Fullagar, it was aware of the problem and believed that some insurers were behaving badly.
He said he believed the problem reflected the manner in which insurers had conducted themselves in the past and the manner in which they were seeking to claw back losses.
"It is awful behaviour and they treating clients poorly," Miles said.
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