2019-09-21

99% of insurance claims

I have seen/heard a couple of slightly odd averts lately. Yes, I try and avoid adverts, but these seemed a tad odd.

One was an advert for a life assurance company proudly claiming that they "pay 100% of claims". The implication (though, I think, not said) is that other companies do not.

This seems a very strange claim to me. That can't mean it, surely. After all, if true, I should put in a claim. I'm not a customer, but if they pay 100% of claims it would be a way to get free money.

So I assume they mean they pay 100% of valid claims. But then that is what I would expect, what is their contract, and indeed what I would expect of every such company. Surely no life assurance company refuses to pay a valid claim, else they just get sued.

The second advert was an insurance company proudly proclaiming that they pay "99% of claims".

Again, odd. If they mean 99% of all claims, then they seem to be proud that only 1% of claims are fraudulent. I have no idea if that is good or bad compared to the industry, but I cannot see how it is a marketing statistic in any way. How is only 1% of claims being fraudulent a "selling point". Or are they saying that actually there are more than 1% that are fraudulent but they pay them anyway, thus being proud that they are being ripped off (and hence the customers that pay premiums being ripped off, ultimately). Or are they saying they don't pay all valid claims? I.e. you have a 1 in 100 chance of your (valid) claim not being paid if you go with them.

I just cannot understand the marketing point being made by either of these adverts. Crazy!

6 comments:

  1. What they mean is for people not to think about it, but just to think "number is nearly 100%" and "my claim will probably be accepted!". i.e. this is a statement that they don't mess their customers around with pointless pettifoggery -- a statement which actually leaves the door open for exactly that, since they don't say they pay those claims *immediately*.

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    Replies
    1. As you say, it does not indicate at all "how much they mess people about", even if it means they reject your claim as a rejected claim would be an invalid claim and so clearly not part of the "100%" they pay. Just total and utter nonsense!

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  2. One of my favourites is "up to 100%". Hair colour that says it will hide "up to 100% of grey hairs".

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  3. What their aim is, is that they don't try to weasel out of paying out as much as their competitors.
    The way they manage to achieve this, is that their premiums are a heck of a lot more than their competitors.

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  4. The second one sounds like NFU Mutual. When I worked there a few years ago, they were very proud of that statistic and that they "do not quibble".

    However, its probably worth remembering that they're only available in certain areas - if you live in a city they're not going to quote (or if they do it will be at a "Go Away" figure). I wonder if their customer mix has something to do with it.

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  5. I was quoted £600 a year for house insurance, I declared value of my belongings as about £1200 which was accurate for the time. I expect that quote was a "go away" figure.

    On the subject of insurance I had a long think about it 18 months ago when I got burgled.

    I lost 3 mobile phones. None were insured, if they were insured I probably would have not got a payout as I went to the shop with front door unlocked. (I didnt think someone would walk in and burgle me in middle of day in a 5 min windows whilst I was at shop, obviously I was wrong).

    Two of the phones I got from EE, and i decided to calculate where I would have stood financially if I took up their insurance option. (we assume they would have sent replacement device), firstly the EE insurance only covers the current contract phone, so the 2nd device would be a loss regardless.

    The first device under EE contract was a samsung S7, I have been with EE for 6 years now, its fair to calculate the cost of insurance for those full 6 years, across all 3 devices I had from them. Over the 6 year period based on their current insurance costs I calculated I would have spent around £800 on insurance. Ultimately I was able to buy a replacement s7 for about £300. Ironically I got the s7 back after, the thief felt guilty and texted a family member to arrange return of the phone. The other 2 phones remain at large tho. Police had no interest whatsoever, for them it was just a formality of giving me a crime number, they assumed I only reported so I could claim insurance. That was their approach to it. They had no interest in trying to do anything with the thief handing the phone back. Obviously I now always lock my door even if only going to a parked car on the road.

    I personally think insurance is in a lot of situations not worth it, where its worth it is in situations of large payouts following only a short period of paying premiums, or if you get it free as an offer e.g. lots of banks offer inclusive phone insurance.

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