Insurance policyholders ‘discouraged’ from using advisers to help with claims

Irish insurance companies are “actively discouraging” their customers from appointing professional advisers to help them during the claims process, the Department of Finance has been warned.

The warning emerged during a review of claims data related to Storm Ophelia in 2017 and Storm Emma in 2018 by Minister of State with responsibility for Insurance Michael D'Arcy last year.

In a letter last year by the Irish Claims Consultants Association (ICCA), which represents loss assessors, Mr D'Arcy was told insurers are "trying to avoid or actively discouraging their policyholders from engaging a Public Loss Assessor to help them with their claim".

The ICCA is the representative body for loss assessors, who generally work on behalf of insurance claimants during the claims process, while loss adjusters work for insurance companies when they are determining what should be paid out.

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In a second letter, sent earlier this year, the ICCA again argued that “insurers actively try and avoid the policyholder engaging their own loss assessor by sending out builders or highlighting [that the hire of the assessor] is at their own expense, etc”.

Responding to the comments, a spokeswoman for Insurance Ireland said all claims settlements are conducted in line with relevant codes of practice. “Section 7.10 of the consumer protection code specifically states that insurers should point out that the policyholder can appoint a loss assessor but at their own expense. Providing this information is a statutory requirement on insurers and they will continue to meet these obligations.”

Concerns

Insurance Ireland said when a party has concerns about how insurers deal with a claim, they should “immediately make a complaint to the relevant bodies. It is only by doing so that the veracity of a particular case can be established”.

Mr D’Arcy has targeted insurers in recent months, claiming that he discovered instances of “sharp practice” in the sector following the extreme weather events . He reviewed the sector late last year following negative feedback he received from policyholders about delays in processing claims relating to the storms, as well as the practice of withholding full payment until after all work has been completed, which insurers say is standard.

He said he is planning to insert amendments into a Sinn Féin private members Bill which would, among other measures, establish a body for the insurance sector similar to the Irish Banking Culture Board.

“We have to change the culture of insurance companies, which is all about profit. Their clients, their most important people, come last,” he told The Irish Times last week.

Insurance Ireland said they were “disappointed with the Minister’s comments and his proposal to proceed with a legislative change based on a position that has not been substantiated regarding claimants from storms Emma and Ophelia”.