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Financial Mail on Sunday

AS INSURANCE CASE HERO OF A BEST-SELLING NOVEL MAKES IT TO THE BIG SCREEN - MEET...

The Claim Maker

By SALLY HAMILTON

FIGHTING an insurance giant makes dramatic viewing in the movie of John Grisham`s The Rainmaker. Actor Matt Damon stars as a young lawyer battling on behalf of a policyholder whose health insurance claim has been rejected by Great Benefit, a fictional US insurer.

Regrettably, this experience is not merely the stuff of novels and movies. It is an event that thousands of people face each year. Insurance companies are parting with their money less readily, due to keener competition, insurance fraud and inflated claims - and the desire to hang on to more of their profits.

According to the Insurance Ombudsman`s annual report,published last week, more than 67,000 people approached the watchdog in 1997, mostly because of rejected claims. Ombudsman Walter Merricks was able to investigate 3,700 cases where policyholders had reached stalemate with their insurers. But as he points out: `That is just the tip of the iceberg`. He is frustrated by the fact that the had to turn away 10,000 grievances simply because they involved intermediaries or brokers, or types of cover outside remit. Of the cases he investigated, nearly a third led to insurers changing their minds and paying up. A total of £6.1 million was awarded to holders of general insurance and life cover.

Jeffrey Salmon announces the nature of his business through his car number plate

Complaint
Most of the disputes centre on policy wording or obscure exclusions.Merricks says: `Insurance is an area where people often have only a vague idea of what they are buying. No one could be expected to read a policy from beginning to end`.
Even when policyholders find claims excluded by policy wording the Ombudsman may still back them.
`If the marketing literature has led someone to expect they are covered I may still uphold the complaint`, he says.
Policyholders are often ignorant about how to pursue a complaint, though policy documents should at least spell out company procedures .Pressure is growing on the government to establish a procedure for all insurance complaints, but for now they are dealt with through the Insurance Ombudsman, the Personal Insurance Arbitration Service, or, when brokers have been used, the Insurance Brokers Registration Council.

Mike Williams, chief executive of the British Insurance and Investment Brokers Association, says: `Claims made through a broker are often settled more quickly and successfully than if policyholders are on their own. Cashflow is king for insurance companies. They want the premiums fast but want to pay out as late as possible`, he says.
Policyholders who claim for a house fire or car theft, for example, will be questioned by a loss adjuster appointed by the insurer to check if a claim is genuine and reasonable. Though adjusters must be fair, policyholders have the right to appoint a loss assessor who will help them prepare and submit a claim and ensure that any settlement is acceptable. Often, they win the policyholder a bigger payment. Assessors charge fees that can range from between 10% and 30%

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