Originally Posted by DanaC
I suspect that health insurance is a little different to home insurance. I know pet insurance and motor insurance are quite different in terms of industry norms in how things are done. The way that risk is calculated and taken account of is a little different. There's even a lot of difference between the way insurance works for landlord property insurance versus homeowner property insurance.
The difference with health insurance, as with pet insurance is that there is an assumption that all policy holders will, at some point, need to claim, and that the rate of claim will increase with age. With home insurance there is an assumption that only a percentage of policy holders will need to claim, and that of policyholders who do need to claim, a percentage will claim one off, and a percentage will claim multiple times, and that a percentage will claim quite small, whilst a percentage will claim big.
Home insurance is supposed to be there if you need it, as long as there was an insurable event covered under your policy. Health insurance is supposed to be there when you need it.
I used to assume that insurance companies (home insurance, not health insurance) just looked for reasons to not pay out, but my experience, both as a customer who had to claim on pet insurance and now as a trainee claims handler (well, just claims handler now :P) is that the approach is more about precision than anything. The basic principle is that they set out, as an insurer, their appetite for risk, and offer cover for specified and generally defined perils and their effects, to specified limits and with an agreed excess and set of conditions. Most of those conditions are common sense - such as maintenance of a roof. In insurance terms, there is a vast difference between a storm of sufficient intensity damaging your roof, and a roof that hasn't been maintained in two decades, and the tiles of which are already loose, springing a leak from an average rainfall. The first is an unforeseen event, and the latter is a predictable consequence of not getting a roofer in.
The basic principle is to indemnify the customer - put them back in the place they were before the unforeseen event happened. That means sometimes, if there's enough wriggle room written into the policy, then best practice is to try to make it happen within the terms of the policy - would you class a hearing aid as a 'personal item' or a piece of 'technology and entertainment e.g audio device'? It isn't specifically mentioned as either...which means it isn't specifically excluded from either cover option.
I spend way more of my time (as do most of the handlers I have seen working) trying to make a claim happen than trying to knock it back.
Sometimes the indemnity mission can lead to things that might seem unfair, or maddeningly pedantic to some. Like if one chair in a matching set is damaged can't be repaired, or can be repaired but will not look the same as the remaining set of chairs - is it indemnifying the customer to completely renew the entire set? Are we then paying for a customer who has damaged a chair to have a complete upgrade of their furniture? On the other hand, if we restore them to the position of having a complete set of furniture, but one piece no longer matches the others, then have we actually indemnified them? They are no longer in the position of having a matching set of chairs ;p
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