Insurance is a vital part of our financial armoury. It’s our backstop in case something goes wrong in our lives, be it a burglary, car crash or an illness that means time off work.
It’s not always mandatory, often voluntary, and yes it can sometimes feel as if you are pouring money down a big, black hole. But, in theory, it’s there to come riding to our rescue when the unexpected happens.
In recent weeks, I have drawn comfort from a couple of the insurance policies I hold.
The first was via the Axa PPP private medical insurance I pay for through my employer (Daily Mail and General Trust). A recent routine medical – arranged through work – showed a marked jump in my PSA score, an indicator of prostate cancer. I was advised to see a specialist as soon as possible.
My private medical insurance meant I was able to see Dr Christopher Ogden, a lovely individual and a pioneering urological surgeon, within days. Following an examination (not particularly pleasant) and an MRI scan, I now await a biopsy and Dr Ogden’s verdict. Thank goodness for my insurance – it could prove a life saver.
The second was through my dental policy. In the past couple of weeks, I have had the ‘pleasure’ of visiting my dental hygienist, an experience probably more daunting than Dr Ogden and his probes. The only blessing I could draw from the painful visit was that the cost (not the pain) of the cleaning process was slightly defrayed by the dental insurance I have with BUPA.
So no complaints? Well, not exactly. Take my medical insurance. Just after Dr Ogden had told me a biopsy would be required, I received a letter from Axa PPP stating in stark black and white: “We have been unable to pay this claim in full because of the benefit limitation on the scheme.”
Insurers could do much better if they put the customer first
Feeling a little emotional, it sent me into a tailspin, thinking the ‘prostate pathway’ I had been put on would have to be abandoned and I would be left in limbo.
It was only after a hurried phone call to the insurer that the letter’s contents were properly explained. Everything was fine, I was told. The letter was triggered by the £100 excess – the sum I must pay to make a claim – which meant a £100 ‘shortfall’ showed up between the treatment costs and the money paid over by the insurer to the medics.
Given that I had already paid the excess over the phone by credit card, there was actually no ‘action you need to take’ (the insurer’s words in its letter) and no shortfall. Indeed, there was no need for the letter. Correspondence, presumably, sent out automatically by computer without anyone at the insurance company checking whether it was appropriate or not. Simply not good enough.
For all the reassurance that most insurance brings, many providers still seem incapable of communicating with customers in language that can be instantly understood. They make everything so difficult.
My mother’s recent ‘spat’ with British Gas is further proof of this disconnect between insurer and customer. My mother has had HomeCare insurance with British Gas for donkey’s years. It provides her with a comfort blanket for when the heating packs up or the plumbing springs a leak. She rarely claims on it, but it is there just in case.
This year, British Gas tried to increase her premiums at renewal by 20%, a price hike my mother could ill-afford. After all, she’s a pensioner, lives alone (my younger son lives close by to keep an eye on her) and gets by on a state pension and a small annuity. So I urged her to complain by giving them a call.
Not one to overlook an argument, she gave the British Gas employee at the end of the phone an almighty ear bashing. The net result was a ‘new’ annual premium of £477.30 – instead of the £596.64 she had been quoted initially. Indeed, a premium lower than the one she had paid for the previous 12 months (£499.39).
Yes, a fantastic result, but it shouldn’t be this way. It should not have to take a phone call for her to get the deal she should have been given right from the word go.
It is great that insurance companies provide peace of mind every day of the year to millions of households and businesses across the country. Yet they could do so much better if only they became more consumer-friendly. It’s a Holy Grail they should strive to achieve soonest. Me and Mum would be happier bunnies, that’s for sure.
JEFF PRESTRIDGE is the personal finance editor of The Mail on Sunday. Email him at email@example.com.