WHY PEOPLE ARE AFRAID OF TAKING INSURANCE
Despite insurance companies housed in gigantic buildings, attractive offices, with active stop, with good customer service people are afraid of taking insurance when an insurance agent purchase them with high promises of payment of their claims when he insures.
My experience of 40 years both in field and administration makes me now to give the following observations.
Here is a small joke to start with why people are afraid of insurance. A luminary said “Insurance people are Shylocks to scissor the claim”. A judge while awarding a claim said Insurance people are Lord they can pay any amount of claim yet general people are allowed in getting their claim in the event of claim if they insurance. In this activity three types of people are behind this promise one is agent and the other is claim settler and the third is unscrupulous client who wants more and more by aggravating the claim.
I was talking of a joke. Their was a galadier leading a road tamasha which after showing many a feat took a lemon and squeezed by his two fingers and extracted the entire juice then he challenged the spectators to extract even a single drop but nobody had the courage to come forward, as the strong man left no possibility of further drops lean chap came forward accepting the challenge he took the piece of lemon and pressed it with ease and some more drops fell down. The galadier bowed down and said “oh great, sir You are pehalwan of which place?” he said in reply “no, no I am an income tax officer”.
In a while another man stepped in and took the lemon further pressed it and a few more drops fell, it was surprising him and put same question about his identity. He simply said “I am insurance claim settler”
Certainly the insurance man has technique in settling the claim to the minimum and that the agent promises of all claims after taking insurance , while the claim settler applies the principle of “insurable interest” to reject the claim as the claim is payable to the owner or one who has right to the insurance. If it is rejected he checks up when insurance is done in utmost good faith that is all the facts which were haphazardly stated are true or else the axe is applied to reject the claim. No matter the proposal is filled in haphazardly by the agent in earlier situation for procuring the business. In a health insurance policy the answer to sufferance of hypertension a neglect in reply debars payment of claim. Many people are deprived of claim for such reckless reply.
When every thing is right and the client feels at ease he is shown another sword indemnity. The settler sees the value of property deprivation etc to reduce the claim as much as possible. When the stage is passed the settler says that “your claim is settled no doubt to the minimum” he says that the remains of damaged items has to be returned as salvage. It is famous that the insured is placed in the same condition of loss, as it is the popularly said insurance is for making people protected.
Finally the person insured says “oh lord it is easy to insure but difficult to get claim that is why to repeat “insurance people are shylocks””
In order to remove such misconceptions the insurer has to train the agent to get the information from the insured from the angle of details of property, the purpose for which it is insured and the details of the person insuring with all sincerity and for this the proposal form is designed but the agent makes a simple job as though all claims will be paid without difficulty. Since the agent is interested in getting commission and ignores unsuitable proposals which bring the insured person into complication and financial sufference in the unit of loss. At the same time the insurer shows no mercy at the time of settlement of claim for this the government had wisely nationalized insurance in 1973 and brought out a compromising deal in classifying the claims into three categories
1. Standard claims which are satisfactory in respects
2. Non standard claims which come in the category of not fitting in cofinancial of policy conditions
3. Ex-gratia claims which are destitute of settlement but deserve some sympathy in settlement, maybe due to business conditions or innocence of the Clement
All the most it is required that awareness among the insuring public to create an awareness that insurance is for their protection and as a financial help to save him from a big loss. In service of insurance industry, as a faculty as well as claim settler, it had been my effort to create an awareness both in the public as well as the staff to remove this anomaly. Unfortunately the ocean is too big and people continued to get claims and insurers continued to synchronize them.
Moreover the person insuring takes insurance as too simple and insurance being a contract that catch a duty on the insure to follow policy conditions subsequent to taking insurance, neglects that his agent would do everything in settlement of claim and enters into complication to disqualify himself from the claim. In a case where a big textile showroom valued in crores was insured under a fire policy for years and at one time when the policy expired on 31st midnight faced a big arson on the wee hours of the next day. The policy lapsed leaving the insured in helpless condition. This situation was an experience and after some years a big iron factory whose insurance policy was expiring on 31st March and when my manager approached for renewal, the chairman of factory told him that since the insurance is effective from 1st April he will give the premium check at early hours of the office. When my manager told me this aspect I said that the policy expires at midnight and there will be no insurance till 10AM when the office opens. Thus there is no insurance for about 10 hours, I then said no one will guarantee that there is no accident as it happened in the case of textile showroom. The manager immediately rushed to chairman and recited the same event. In a minute the chairman understood and gave him the premium check. Thus it is necessary that the insurance lacks awareness and always rights over the agent that he is doing favor at the time of insurance, but this makes him disabled at the time of claim.
An interesting claim came before me where the car owner said that an ass kicked his car and four doors were damaged and he claimed repay charges. Surprisingly I questioned him “was your car damaged by the kick of the ass which has kick on one side of the door and it went to the other side and kicked the other two doors”. He thought that it was easy to make all sides of claims when he was made aware that If the ass kicked the door will kick on one side only and if it is man will go to the other side to damage other two doors .On this the owner of car was answer less. However only damage of two doors were allowed and he quietly accepted it.
In another case the bus owner taking the pretext of the accident and replaced the entire hood of the bus and when the claim was sent to me for approval I detected the photograph of the damaged bus showed 18 windows where as the photographs of bus after repairs showed 24 doors. That is he made a claim for changing the hood of the bus and this small effect made the claim destitute of settlement.
Such many cases come and this needs a fair education and awareness in the insured persons.
Further in third party claims the owners of trucks were insuring it after the death of the third party as the cover note issued by the agents had the specified time and the few hours of accident. My experience showed that all insurances should be accepted effective from the next day onwards. Thereby my instructions were officially spread in my division and finally it was adapted by all. This prevented many third party claims and this aspect was seen by GIC for such a decision somewhere in 1988.
Don’t you think that my words at this age are a panacea to eradicate insurance phobia!
