Insurance – It is indeed a racket and probably always has been

I read a book not so long ago about Samuel Plimsoll (he of the Plimsoll Line on ships) called ‘The Plimsoll Sensation’ by Nicolette Jones. Within that book, which I heartily recommend, you read of the very worst aspects of insurance in that ship owners insured ships that were unfit to leave port knowing that they would be paid out if and more likely when their overloaded coffin ships were lost at sea. The lives of seafarers were not of importance but the insurance of the cargo carried by the overloaded ships was.

That it took so long to put a stop to unfit ships being sent to sea is a chapter of our history, as a seafaring nation, that shames us but it also highlights how insurance was manipulated for gain by the unscrupulous.

Modern-day insurance also has its scandals and probably the biggest is the one whereby a personal injury claim is made and paid out when a person travelling in a vehicle involved in an accident has probably not been hurt at all. These are the infamous whiplash claims that we all get phone calls about from claims specialist companies who want us to make a claim so that they can make a few bob by helping us get a payout.

Here’s an example – A very, very minor incident of little consequence involving a reversing manoeuvre where one car bumped into another parked car travelling at walking pace or less. The cars were hardly damaged one needing just a bumper respray and all was well again. Yet the number of telephone calls the driver of that car has had since (and is still getting I understand!) begging them to make a claim has been utterly ridiculous. The police were not involved, no injuries, no witnesses, hardly an event at all. A quiet hello, sorry and exchange of insurance information. So who gave the ‘accident’ information to the many claims companies who have been relentlessly calling? Some of those calls have even been to a mobile phone number not even given out during the incident.

But then some weeks later the driver, who had admitted responsibility for the minor bump, was told that the people sat in the parked car that they had rolled into had made personal injury claims! Surely a joke, how on earth could anyone have been injured, it made no sense.

Moving on the insurance company then asked the same driver if they would be willing to help them fight the claim and if necessary go to court to give evidence. The driver agreed and thought a positive and robust defence of the frankly ridiculous claim would be the outcome with the personal injury claims being thrown out. Sadly no, it all came to nothing and you may not be at all surprised to hear that a payout for personal injury was actually made.

But, and here’s the rub, the driver was told by a legal representative working for the insurance company that they had decided not to defend the claim in the end because the occupants of the car bumped into said they could detect movement and that, believe it or not, seems to be the test for a payout! Goodness me someone slamming a car door can create movement which a person sat in the same car can detect, so does that qualify for a payout too!?

So as far as I can see if you make a personal injury claim following a vehicle accident and are willing to say you could detect movement you are almost bound to get a payout! No wonder insurance premiums are through the roof. Car insurance sadly really is a racket and maybe only fools say they were not injured when they were not in fact injured.

Forgive me but has insurance moved on much since the days of the coffin ships?