Insurance Helpline: The bitter taste of poor insurance service
QUESTION: I am writing to highlight some of the challenges that are being faced by citizens in the insurance market. I have been a very good client of ... for nearly 20 years. I have had at least two motor cars and household insurance with them. I have never had an at-fault accident. I submitted two claims for damaged windshields. They amounted to a total of $25,000. My wife, on the other hand, was insured with the same company since March 2012. She had an accident last October. Her's was a single-vehicle collision. She lost control of the vehicle and ran off the road into trees along the highway. The vehicle, a 2010 Toyota Avensis, was written off. The insurer initially refused to keep the salvage but relented in January 2015.
The episode has left a bitter taste. My wife and I had to fight very hard to get a fair settlement. This car was owned, driven and insured in my wife's name. I am shocked and upset by the company's treatment. A representative phoned and quoted the renewal premium for my car. When I visited their offices a few days later and, after waiting 20 minutes, I was told that they were no longer interested in doing business with me because of the claims that I had in the last five years. There was no notice or apologies; slam-bang. The company's assertions about my claims history were false. I am being treated rather unprofessionally and unfairly by a company that really needs to get out of motor vehicle insurance business.
INSURANCE HELPLINE: The company made mistakes in how it handled the renewal of your policy. However, because there are at least two sides to every argument, I sent your email to the company's managing director for comment.
Having done so, I am obliged to declare that I have a long personal and professional relationship with the holder of that office who is a person of high integrity. My links with that individual will not in any way interfere with what I write about your experiences.
The MD wrote: "... suffered a loss on October 18, 2014. The damage assessment was received on November 4, 2014 which provided a pre-accident value/market value of $2,350,000. The reasons substantiating the value were subsequently provided.
"After discussions with (the claimant) we sought another opinion on the value from MSC McKay (they had done a previous valuation dated April 17, 2014 and had recommended a value of $2,540,000). This value had been used to calculate the premium. They advised that at the time of the loss the market value of a similar vehicle would be $2,380,000. This was communicated to the insured who was not in agreement. Calls were then made to car marts which confirmed that the values received were in fact correct, she was given the information for self-verification.
"We explained to her that our motor policy states that the most we will pay will be the lower of the market value of the vehicle or the amount the vehicle is insured for.
"She contended that she had purchased the vehicle in Europe and that she would not be able to purchase another vehicle of same make and model in Europe based on our offer to her. She was advised that we rely on the current market values in Jamaica as this is the jurisdiction of the policy. As such, whilst we do not limit our research to Jamaica only, we must take the prevailing conditions in Jamaica into consideration.
"We relied on the value provided by MSC McKay (as we had used them to determine the value at the time of insuring) in making the offer of settlement. Hence our initial offer was increased by $30,000.
"We were ready and willing to settle the claim from December 5th for $2,380,000 and this was outlined in our written communication to her. This was rejected by our insured's letter of December 18, 2014. The insured subsequently wrote to the Financial Services Commission, who wrote to us; we responded and the insured accepted our offer ($2,380,000) thereafter.
"Our policy gives us the discretion to offer the salvage to the insured, which we exercised. This is however usually done when we find ourselves with unusual vehicles that we know will be extremely difficult to dispose of. The claimant advised that she was not interested in same and we kept it. We should point out that as there is no market for this particular vehicle it was donated to the Jamaica-German Automotive School.
"I think here we did not act properly. Our underwriter decided not to invite renewal. However, a renewal notice was sent. It is our policy that once a notice is sent (unless there were circumstances which arose after the notice was sent) it must be honoured. This was not done. We regret this error and would be willing to renew the policy if the insured remains interested. I have also taken the opportunity to remind our team of our moral responsibility."
The issues you described are not limited to moral duties.
The MD has still not understood the bitter taste that was left in your mouth after your wife's claim was eventually settled. Your feelings about the poor service in other encounters with the company have not been validated.
Benjamin Schneider and David E. Bowen in their 1995 book - Winning the Service Game - write: "customers require that their esteem be maintained or enhanced during service encounters ... long-term customers deserve special attention for their loyalty."
You have since divorced your insurers. This was the right thing to have done.
n Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: email@example.com