Am I being conned by my bike insurance company?

[DIPSLICK]

Absolutely!!

 

People who say "Insurers make money by not paying claims" are very incorrect and uninformed.

 

Insurers who "look" for ways to not pay claims, bleed customers very quickly. Acquiring new insurance customers is a massively expensive exersuce. This is way people like OutSurance will pay you R800 just to quote with a smile on their face. Cost of acquisition often runs into the thousands! So keeping a client is WAY cheaper. This is why insurers will often pay claims that they don't necessarily need to.

 

Insurance companies make money from pricing their policies accurately and then managing their risks. Claim repudiation is not a profit strategy from the major traditional insurers that I have dealt with ( I cannot speak on behalf of the direct guys though). This is not an opinion, I am stating it as fact.

 

 

honestly I dont have issues with insurances my claims get paid, ive got an brilliant broker, saying that,,, read through your policy make sure of small print that voids payment

I have seen how insurance companies take advantage of people who are uniformed and accept the insurance companies "policy" and dont follow through or accept non payment. looong story short unless you are anal and read your policy from top to bottom and FULLY UNDERSTAND it get a broker or the insurance IMHO will look for ways out 

 

 

better??  

Edited March 1, 2017 by DIPSLICK

[GrumpyOldGuy]

Absolutely!!

 

People who say "Insurers make money by not paying claims" are very incorrect and uninformed.

 

Insurers who "look" for ways to not pay claims, bleed customers very quickly. Acquiring new insurance customers is a massively expensive exersuce. This is way people like OutSurance will pay you R800 just to quote with a smile on their face. Cost of acquisition often runs into the thousands! So keeping a client is WAY cheaper. This is why insurers will often pay claims that they don't necessarily need to.

 

Insurance companies make money from pricing their policies accurately and then managing their risks. Claim repudiation is not a profit strategy from the major traditional insurers that I have dealt with ( I cannot speak on behalf of the direct guys though). This is not an opinion, I am stating it as fact.

I agree...a bit.

 

There are insurers though who in my opinion write sections into their policies which are aimed at reducing their risk to almost zero.

 

I will give you a case from my experience. Many years ago I bought a commercial building on a First National bank auction. As FNB was the bond holder I just left the building insurance with them (ie) Outsurance. 

 

I did the building up and rented the space out, about 6 months after the tenant had moved in, the geyser which was over the office burst and almost fell through, destroying the ceiling and carpets (which I had laid new 6 months previously) and flooded the office.Naturally I called the insurer and left it with them.

 

Imagine my surprise when a few days later they repudiated my claim based on the fact that the assessor had decided the pipes in the ceiling were not well maintained and showed signs of rust. I was floored and asked the assessor who on earth inspects their pipes in the ceiling and how do I know if they are liable to burst.

Like you maintain your car you must maintain your ceiling pipes, I was curtly informed.

 

Anyway, after searching through pages of fine print I noted this condition WAS indeed written into the policy and needless to say, I had no claim and had to carry the cost of repairs myself.

 

This, to me was simply a way of removing almost all risk from a common claimable item to the disadvantage of the client / insured.

 

To make a long story shorter, my long standing company and personal insurance was with PFV brokers through Mutual and Federal, so I asked my broker how they would have handled it. "We would have paid of course" they said, we dont expect you to climb around in the ceiling and inspect pipes, and I moved my building insurance that afternoon under my M&F umbrella.

Edited March 1, 2017 by GrumpyOldGuy

[Eddy Gordo]

I agree...a bit.

 

There are insurers though who in my opinion write sections into their policies which are aimed at reducing their risk to almost zero.

 

I will give you a case from my experience. Many years ago I bought a commercial building on a First National bank auction. As FNB was the bond holder I just left the building insurance with them (ie) Outsurance. 

 

I did the building up and rented the space out, about 6 months after the tenant had moved in, the geyser which was over the office burst and almost fell through, destroying the ceiling and carpets (which I had laid new 6 months previously) and flooded the office.Naturally I called the insurer and left it with them.

 

Imagine my surprise when a few days later they repudiated my claim based on the fact that the assessor had decided the pipes in the ceiling were not well maintained and showed signs of rust. I was floored and asked the assessor who on earth inspects their pipes in the ceiling and how do I know if they are liable to burst.

Like you maintain your car you must maintain your ceiling pipes, I was curtly informed.

 

Anyway, after searching through pages of fine print I noted this condition WAS indeed written into the policy and needless to say, I had no claim and had to carry the cost of repairs myself.

 

This, to me was simply a way of removing almost all risk from a common claimable item to the disadvantage of the client / insured.

 

To make a long story shorter, my long standing company and personal insurance was with PFV brokers through Mutual and Federal, so I asked my broker how they would have handled it. "We would have paid of course" they said, we dont expect you to climb around in the ceiling and inspect pipes, and I moved my building insurance that afternoon under my M&F umbrella.

Yeah, I am with them for some years now, and now complaints. 

My bicycles are with them under household insurance

[HBO]

I agree...a bit.

 

There are insurers though who in my opinion write sections into their policies which are aimed at reducing their risk to almost zero.

 

I will give you a case from my experience. Many years ago I bought a commercial building on a First National bank auction. As FNB was the bond holder I just left the building insurance with them (ie) Outsurance. 

 

I did the building up and rented the space out, about 6 months after the tenant had moved in, the geyser which was over the office burst and almost fell through, destroying the ceiling and carpets (which I had laid new 6 months previously) and flooded the office.Naturally I called the insurer and left it with them.

 

Imagine my surprise when a few days later they repudiated my claim based on the fact that the assessor had decided the pipes in the ceiling were not well maintained and showed signs of rust. I was floored and asked the assessor who on earth inspects their pipes in the ceiling and how do I know if they are liable to burst.

Like you maintain your car you must maintain your ceiling pipes, I was curtly informed.

 

Anyway, after searching through pages of fine print I noted this condition WAS indeed written into the policy and needless to say, I had no claim and had to carry the cost of repairs myself.

 

This, to me was simply a way of removing almost all risk from a common claimable item to the disadvantage of the client / insured.

 

To make a long story shorter, my long standing company and personal insurance was with PFV brokers through Mutual and Federal, so I asked my broker how they would have handled it. "We would have paid of course" they said, we dont expect you to climb around in the ceiling and inspect pipes, and I moved my building insurance that afternoon under my M&F umbrella.

Well at worst a reputable insurer (read non-direct) would not pay to repair the rusted pipes. But the consequential damage will definitely be paid. It's water/ flood damage which is a peril. Period.

 

I have found a couple of times that insurers interpret/ apply their own wording incorrectly and clients just accept this to easily. I had a client who contacted me last year via a referral after his insurer repudiate his claim for flood damage also on a commercial building (that was the storms we had in Gauteng in November). they also claimed that the damages was maintenance related. I advise him how to argue this point which he did and they settled him eventually. He is now one of my clients and he has quite a large property portfolio.

 

This exact case is a very good example. The insurer repudiates the OP's claim, arguing it's maintenance related- they said the chain rings are worn out- but they haven't even inspected the bike. And from the picture's the OP posted, the chain rings looks in good condition. It looks as if the OP is willing to accept this, which again is a common problem in the market especially amongst the younger clients. They accept these repudiations too easily. 

[GrumpyOldGuy]

Well at worst a reputable insurer (read non-direct) would not pay to repair the rusted pipes. But the consequential damage will definitely be paid. It's water/ flood damage which is a peril. Period.

 

I have found a couple of times that insurers interpret/ apply their own wording incorrectly and clients just accept this to easily. I had a client who contacted me last year via a referral after his insurer repudiate his claim for flood damage also on a commercial building (that was the storms we had in Gauteng in November). they also claimed that the damages was maintenance related. I advise him how to argue this point which he did and they settled him eventually. He is now one of my clients and he has quite a large property portfolio.

 

This exact case is a very good example. The insurer repudiates the OP's claim, arguing it's maintenance related- they said the chain rings are worn out- but they haven't even inspected the bike. And from the picture's the OP posted, the chain rings looks in good condition. It looks as if the OP is willing to accept this, which again is a common problem in the market especially amongst the younger clients. They accept these repudiations too easily. 

Yes, I agree, however I think its also a toss up between Time v Effort v Cost, if the time and the effort I am going to have to put in to fight an issue is too much (my own value, each person will be different) I am probably just going to walk away.

 

I think some insurers know this all too well and use it to their advantage. 

 

Mostly claims are urgent, insurers have time on their side, they are not inconvenienced, I need the ceiling / carpet fixed, my tenant is hollering down the phone to me daily, I cant tell him I will be fighting the case with the insurer for the next 6 weeks, or longer, he is not interested, so I have to make the call, is the time and effort worth it?,.... in this case I walked away.

[Stoffel76]

Well at worst a reputable insurer (read non-direct) would not pay to repair the rusted pipes. But the consequential damage will definitely be paid. It's water/ flood damage which is a peril. Period.

 

Which actually relates back to the OP...  on a decent policy, if chain ring etc wear caused the chain suck, you obviously couldn't claim for new chain and chain rings, but should be able to claim for the resultant damage to the frame - assuming it was a once off incident.  However, if you had constant chain suck because of worn parts and your riding habit of dropping down to the small gear and that eventually caused the hole then, fair enough, the insurer would be within their rights to decline the claim...

[HBO]

Which actually relates back to the OP...  on a decent policy, if chain ring etc wear caused the chain suck, you obviously couldn't claim for new chain and chain rings, but should be able to claim for the resultant damage to the frame - assuming it was a once off incident.  However, if you had constant chain suck because of worn parts and your riding habit of dropping down to the small gear and that eventually caused the hole then, fair enough, the insurer would be within their rights to decline the claim...

Exactly, but they have to proof this. if he was my client, I would have from the start requested a more detailed report, not just 1 sentence which reads that "Damage is due to chain suck". I would have asked for a more detailed explanation, explaining exactly what a chain suck is, what caused it and how it is possible to have caused that hole.

 

If the insurer then wants to claim that it is actually due to wear and tear, then the onus is on them to proof it.

[Skylark]

It's not lying though. And it's definitely a more feasible explanation than chain suck. Sorry but there is just no chance of chain suck causing a frame to crack. It's ridiculous.

 

Take it to another bike shop for a second opinion and see what they say.

The shop is calling chainsuck as the original incident that caused the chain to jump off the chain ring and damage the frame, chainsuck is generally as a result of worn drive train component/s, hence not a claimable event. The shop may have just been using chainsuck as a generic term not as a specific descriptor, maybe they barely looked at it(as many lbs are wont to do) and thought "yip probably chainsuck"...

 

But if the drivetrain is fine and the op rather made a shifting mistake under power which resulted in the chain jumping off and damaging the frame that is easily a claimable incident.

 

But now that he's sent through chainsuck as the description he is in a pickle. That may have been as a result of not having a broker to advise him on how insurance and claims work, ie evaluating whether it is a claimable event and why before submitting the claims. Not facilitating fraud as many have alluded to but rather to make sure the claim is within the ambit of the policy and that the event is correctly described before submitting.

 

 

Edit: seems even if you had chainsuck as a result of worn drivetrain you can still claim for the consequential damage if the item is insured for all risks?

 

But most policies have clauses about negligence/maintenance, ie if your car is not in roadworthy condition and that causes the accident, say bald tyres they will repudiate the claim, why wouldn't that apply here and the other examples in posts above where people have stated that consequential damage can be claimed for even as a result of lack of maintenance, ie rusty pipes?

Edited March 3, 2017 by Skylark

[GrumpyOldGuy]

The shop is calling chainsuck as the original incident that caused the chain to jump off the chain ring and damage the frame, chainsuck is generally as a result of worn drive train component/s, hence not a claimable event. The shop may have just been using chainsuck as a generic term not as a specific descriptor, maybe they barely looked at it(as many lbs are wont to do) and thought "yip probably chainsuck"...

 

But if the drivetrain is fine and the op rather made a shifting mistake under power which resulted in the chain jumping off and damaging the frame that is easily a claimable incident.

 

But now that he's sent through chainsuck as the description he is in a pickle. That may have been as a result of not having a broker to advise him on how insurance and claims work, ie evaluating whether it is a claimable event and why before submitting the claims. Not facilitating fraud as many have alluded to but rather to make sure the claim is within the ambit of the policy and that the event is correctly described before submitting.

 

 

Edit: seems even if you had chainsuck as a result of worn drivetrain you can still claim for the consequential damage if the item is insured for all risks?

 

But most policies have clauses about negligence/maintenance, ie if your car is not in roadworthy condition and that causes the accident, say bald tyres they will repudiate the claim, why wouldn't that apply here and the other examples in posts above where people have stated that consequential damage can be claimed for even as a result of lack of maintenance, ie rusty pipes?

To be honest I think its very much like Dipslick said, wither you simply write risk out of your policy or look for reasons to not pay the end result is the same. Its just phrased differently.

 

I also think its easy to jump on the righteous band wagon and preach about reading the policy and asking questions, but almost everyone I know who has had a claim repudiated actually believed they were covered, they were not trying to wiggle things through, they honestly believed they had a legitimate claim.

 

In my opinion most people will expect an insurer to cover them for certain risk completely, its a given, for example, I insure my car against theft I expect it to be paid out or replaced if its not there when I return, but if suddenly my claim is repudiated because the insurer has written in a clause which says I am only covered if my car is parked in a lighted street (as a hypothetical example) then I am going to feel hard done by and rightly so I would think.

 

Its much the same with pipes in your ceiling, I am not a plumber and I dont go into my ceiling to inspect my pipes, but I am pretty darn sure that there will not be a single building thats a year or two old where you will NOT find some sign of rust on a pipe, so when I have insurance for water damage due to a geyser / pipe failure I expect the insurer to honour the spirit of the contract, I take it as a given there are no unusual exceptions under which they can repudiate the claim and the consequential damage, based on "their assessment" that the pipes had not been maintained. 

 

One also has to remember this was a commercial insurance, not a private or residential one so the conditions may differ.

Edited March 3, 2017 by GrumpyOldGuy