Salary protection insurance cancelled
Discussion
Morning PH collective 
A friend, (Yes really!) had contacted me to say their insurer has cancelled their policy, and in writing stated this is due to dishonest behaviour.
Background:
Policy is taken out 18+ months ago, seems as though this was initially through a broker to collect details, and then through final discourse with a call handler at the insurer.
Friend has a long term medical issue, but during the calls couldn't recall exactly when it started - was assured this would not be an issue and cover would be provided.
End of last year the situation has worsened and friend has an operation to correct the issue, this leaves them unable to work for a few works.
Friend initiates a claim on the policy.
Insurer comes back and says words to the effect of "sorry you are not covered as the medical notes indicate an inconsistency with the timeframes you told us at inception".
Shortly after this friend receives a cancellation notice, including the following statement:
I am certain that they have not acted dishonestly, and I'm concerned that a cancellation such as this will impact their ability to get any other kind of insurance cover in the future - regardless of type. (Am I right to have suggested this?)
What are PHers thoughts on this? Is my friend properly f
ked now regardless?
(edited to fix quote bit)
A friend, (Yes really!) had contacted me to say their insurer has cancelled their policy, and in writing stated this is due to dishonest behaviour.
Background:
Policy is taken out 18+ months ago, seems as though this was initially through a broker to collect details, and then through final discourse with a call handler at the insurer.
Friend has a long term medical issue, but during the calls couldn't recall exactly when it started - was assured this would not be an issue and cover would be provided.
End of last year the situation has worsened and friend has an operation to correct the issue, this leaves them unable to work for a few works.
Friend initiates a claim on the policy.
Insurer comes back and says words to the effect of "sorry you are not covered as the medical notes indicate an inconsistency with the timeframes you told us at inception".
Shortly after this friend receives a cancellation notice, including the following statement:
Insurer said:
We’ve already cancelled your policy, so your cover is no longer in place.
We’ve made the decision not to refund any of the premiums you’ve paid.
We based our decision on guidance from The Consumer Insurance Disclosure and Representation Act. This says we can keep premiums paid to us if we find out new information when reviewing a claim that we believe a customer deliberately didn’t tell us about in their application.
Based on the information from your doctor and our discussions with you, we believe you would have known you hadn’t answered the questions correctly on your application.
I understand this isn’t the outcome you were hoping for, but I want to assure you your claim was carefully reviewed before we reached this decision.
It might be helpful to speak to your financial adviser to understand how this affects your financial planning needs.
I've urged friend to complain about this, especially as there appears to be at least one missing call from the insurers call logs. We’ve made the decision not to refund any of the premiums you’ve paid.
We based our decision on guidance from The Consumer Insurance Disclosure and Representation Act. This says we can keep premiums paid to us if we find out new information when reviewing a claim that we believe a customer deliberately didn’t tell us about in their application.
Based on the information from your doctor and our discussions with you, we believe you would have known you hadn’t answered the questions correctly on your application.
I understand this isn’t the outcome you were hoping for, but I want to assure you your claim was carefully reviewed before we reached this decision.
It might be helpful to speak to your financial adviser to understand how this affects your financial planning needs.
I am certain that they have not acted dishonestly, and I'm concerned that a cancellation such as this will impact their ability to get any other kind of insurance cover in the future - regardless of type. (Am I right to have suggested this?)
What are PHers thoughts on this? Is my friend properly f
ked now regardless? (edited to fix quote bit)
Edited by BrettMRC on Monday 17th March 08:55
I am no expert in such matters but having had cause to complain/appeal one insurance & 3 professional decisions in the last couple of years I can pretty much tell you what the accepted procedure will be.
Complain/appeal through their own complaints/appeal process.
Generally the process will have a time constraint such as they have 8/10/12 weeks to complete this.
Only when they have been given the chance to complete this process within their own timescale are you allowed to escalate through another body such as Ombudsman etc, as before that point the Ombudsman will just say they have a chance to sort it first.
Complain/appeal through their own complaints/appeal process.
Generally the process will have a time constraint such as they have 8/10/12 weeks to complete this.
Only when they have been given the chance to complete this process within their own timescale are you allowed to escalate through another body such as Ombudsman etc, as before that point the Ombudsman will just say they have a chance to sort it first.
Edited by E-bmw on Monday 17th March 08:38
Judging from the amount of conversations I have had with various Insurance brokers for PMI and also Protection planning, any issues have to be pretty accurately recorded and discussed prior to then the GP being contacted if applicable.
Not recalling exactly when an issue started ( to the day or week or month probably isn't an issue ) but no Insurer would simply say " oh it doesn't matter if you cannot recall exactly "
Requiring an operation then implies this was not something relatively trivial..
I'm not sure I would view your friend as being "dishonest " but clearly if the Insurer has not being given correct details or the details are "underplayed " they obviously feel that it is serious enough to refuse the claim.
It is interesting that they haven't cancelled the policy "abinitio " ie as though it never existed and are also hanging onto the premiums paid monthly thus far.
For this reason alone I would think a complaint to the FO may be in order but first I would be writing back to the Insurers complaints dept and see where that goes.
Actually given this was arranged through a broker I would start with them.
The complaint should be polite but focus on the emotional distress etc and the fact that the policy was not cancelled abinitio.
If needs be also cc their CEO.
Any cancellation will not however impact any Car or House Insurance type policies which are entirely different and so if the cancelled question is asked your friend would not have anything relevant to declare.
Not recalling exactly when an issue started ( to the day or week or month probably isn't an issue ) but no Insurer would simply say " oh it doesn't matter if you cannot recall exactly "
Requiring an operation then implies this was not something relatively trivial..
I'm not sure I would view your friend as being "dishonest " but clearly if the Insurer has not being given correct details or the details are "underplayed " they obviously feel that it is serious enough to refuse the claim.
It is interesting that they haven't cancelled the policy "abinitio " ie as though it never existed and are also hanging onto the premiums paid monthly thus far.
For this reason alone I would think a complaint to the FO may be in order but first I would be writing back to the Insurers complaints dept and see where that goes.
Actually given this was arranged through a broker I would start with them.
The complaint should be polite but focus on the emotional distress etc and the fact that the policy was not cancelled abinitio.
If needs be also cc their CEO.
Any cancellation will not however impact any Car or House Insurance type policies which are entirely different and so if the cancelled question is asked your friend would not have anything relevant to declare.
alscar said:
Not recalling exactly when an issue started ( to the day or week or month probably isn't an issue ) but no Insurer would simply say " oh it doesn't matter if you cannot recall exactly "
This raises a very valid point.Any time when I haven't been able to 100% recall a specific detail, if the Ins. Co. deems this to be critical, I have always had a written request follow up with a timescale to reply or cancellation/policy adjustment would be appropriate.
OP.
Is your friend certain they didn't ask for confirmation "after the fact"?
Gassing Station | Speed, Plod & the Law | Top of Page | What's New | My Stuff