Supreme Court ruling could raise premiums
Premiums could go up as a result of a Supreme Court ruling that found insurers must still pay out even if they discover the claimant lied in their claim.
The ruling stated that ‘collateral lies’ – those told to support a claim but essentially immaterial to the right to claim – should no longer invalidate the claim.
In response, brokers have warned that this will lead to higher premiums and slower processes, as insurers carry out more detailed investigations.
Speaking to Insurance Age, David Lamping, head of claims at Cooke & Mason, said, ‘For the honest claimant and the already overworked claims department of the insurance broker this will lead to more intensive validation and a slowing down of the process. It’s annoying for brokers because clients don’t like it and they tend to look to the broker to make the insurer get on with the claim. And insurers regard excessive pressure to make progress from the broker as a fraud indicator. It becomes a self-destructive cycle.’
He also warned that the increased amount of time and work spent on investigating claims would lead to more expensive insurance policies.
He said, ‘Insurers never do anything to absorb those sorts of costs, they just go on the premium.’