Insurers, What Are They For?

July, 2010

(Or an argument in favor of justifiable homicide?)

I believe that modern insurance started in Lloyds coffee house in London around 1690, when people involved in shipping got together to share the risk of a ship being lost. Since then, the Insurance industry has grown into a multibillion-dollar industry whose main focus seems to be to screw me and mine.
Item 1: My daughter parked her car; about 2 a.m., two guys came out of a club and proceeded to smash up eight cars, including hers, and two shop windows and were just starting a fire in a litter bin when the county mounties turned up and arrested them. No problem, she has insurance. Well, not quite.
The insurers recovered her car to their yard, which is halfway across the county. Cost of damage, £2.000; their valuation on the car, £1,000 – so it’s a write-off and here’s your £1,000. Hang on a minute; they broke the front and rear screens, ripped off a mirror, and scratched the paint. The car is 14 years old; we can put up with a few scratches. We asked the insurers: Can we buy the car back (£87) and carry out the repairs ourselves?
A reluctant yes, but “since we have written it off, you have to tow it back to your repairer (£120).” And when it’s fixed, you have to repeat the annual test (done two weeks ago (another £50) and take it to a government-approved center for a vehicle identity check to make sure that you’re not trying to pass off another car using the wrong identity (that’s about £90). So that’s £347 gone from our £1,000 before we start.
The new screens are about £450, plus the fixing costs, and there goes the thousand, which is actually £750 because we forgot the claim excess. Take off the excess costs that we would not have to pay if they had taken it to the local garage and talked to us but no, we’re screwed. Daughter has the wife’s car and I am £9k in the hole to get “she who must be obeyed” a new set of wheels.
Item 2: The man is in to refurb my bathroom; he’s a good old boy who does a thorough job and doesn’t rip me off. Day two, he shows me where the bandito who installed it included a free leak in the shower, which has rotted the joists. No problem, I have insurance. I call up the insurers, who send someone to assess the damage. This “technical expert” would have found a screwdriver a technical challenge.
At first he “can’t see a problem,” even though there was wet rotten timber about 6 inches from his nose. Fortunately, my builder and the builder he had brought to check out my guy’s assessment of the problem spoke the same language, and they had pretty soon agreed what had to be done, rather contemptuously ignoring the guy with the shiny shoes and blank expression.
Problem was, they would have to rip off the entire floor covering to lift the floor boards to fix the joists, so the costs would run into thousands of pounds. Not our problem, say the insurers: Yes, you are covered against water damage, but this isn’t water damage; it’s poor workmanship, which isn’t covered. Result? I get a bill for several thousand pounds and the right to sue a builder that is long gone and untraceable.
Item 3: My car insurance is due; I can renew it online and save £10. Well, no, I can’t, because the bloody web page won’t go any further than agreeing that I am who I say I am and that, yes, I want to renew my insurance. I try for two days, and here’s an interesting thing. According to the advert on the web page, if I start a new policy, I can get two months free or about 17% off. So option (a) a loyal customer who has been with you for many years can save £10 but can’t because the web page isn’t working; or option (b) you can insure the car from new and save about £50.
I decided to call the insurers and discuss this. I call the number and it’s a voice-recognition robot, which doesn’t have as an option: “I want to ask why are you ripping me off?” Hang up, get a coffee, have some therapy and try again. I’ve got it sussed: Ignore the robot or give nonsense answers, and eventually I get to talk to a charming lady in a call center in India.
Yes, she will register my complaint about the robot; most people she talks to want to register a complaint about the robot (no surprises there then). She calmly explains that I have misunderstood; the two-month discount is for new customers only, not for loyal customers that have been with them for 20 years.
OK, so they don’t value my custom, so I will go somewhere else, is that what she wants? I got the discount.
So all in all, insurers do not insure you for what you want, but what they want to give you. And most of the time when you think you are covered, you are not. Will insurers give you the best deal or take you for every penny they can – you work it out.
Oh, and the MPs
A few months ago, I wrote about all the “honorable members” of Parliament who had been caught with their snouts in the trough and taken taxpayers’ pounds in unjustified expenses. Most people reading the information revealed in the investigation would have had little difficulty in finding a few dozen that should have gone to court, but it seems that most of them got away with simply paying back the money. About six are standing trial; a hundred or so stepped down at the recent election; and the rest got away free and clear.
Move on, turn the page, we have a new government pledged to be squeaky clean and to rein in government spending on things such as ministerial cars and unreasonable expenses. Eighteen days in, and one minister has gone when it was revealed that he paid £40,000 in taxpayers’ money in rent to his partner; his replacement also has some issues over questionable claims.
Another minister going to an official event in Dunkirk takes a government car and driver and spends a night in France at more than four times the ­cost to the taxpayers of taking a ride on Eurostar.
Peter Guest is Parking Today’s correspondent on all things British, European and other parking-related topics “over there.” He can be reached at peter@parkingtoday.com.