Monday, March 24, 2008

Lying On Your Insurance Forms

A report says that over one million Brits lie on their insurance forms.

About a quarter of Brits admit to guessing on the information they fill out.

Here's the story:

Sainsbury's Finance estimates 24 million general insurance policies have been taken out in the last five years with people guessing at facts or simply lying.

While most insurance companies will look at unintentional mistakes on applications with leniency, by not providing the whole truth people are at risk of having claims rejected.

Steve Johnson, head of insurance at Sainsbury's Finance, said: "It really is quite concerning that so many people seem to think it doesn't matter if they take a guess at the information requested at the point of taking out cover.

"Although it may seem like a good idea in an effort to save time, it could become a real headache later when they find they have invalidated their claim.

"If unsure of the answer to a question when getting a quote or buying cover we would encourage people to always take the time to go back and check any details, you can always phone back or gather all your personal documents together and apply online, in some cases you can retrieve online quotes and modify them later."

People are most likely to lie or guess when applying for home insurance – with 18 per cent admitting all the facts may not be there – despite homeowners facing the greatest financial burden should a policy be rejected.

Some 15 per cent are not completely honest over car insurance applications, while 12 per cent give false information on travel insurance forms.

The finding follow figures from UK fraud prevention service Cifas revealing a 24 per cent rise in people committing fraud when applying for financial products.

Consumers Hate Insurers

The Palm Beach Post reports that most consumers don't like their insurance companies.

Randy Diamond writes:

You would think that homeowners looking for a new insurance company might have some issues with their current carrier. That’s exactly the finding of a new survey by Home Insurance Buyers Guide LLC. The Internet startup’s survey of 330 users found 58 percent were dissatisfied with their insurance company, 27 percent satisfied and 15 percent delighted.

Among those who were dissatisfied, 60 percent were not happy because they were canceled by their insurer, 38 percent were upset with the cost of insurance and 20 percent complained about their insurer’s customer service.

Michael Letcher, founder of the Home Insurance Buyers Guide, plans to publish satisfaction ratings for individual insurers in the coming months, but says he does not have names as of yet because he needs a larger sample size.

Letcher’s paid subscription site is one of two aimed at helping consumers navigate finding property insurance. The other free site is run by the state, Shop and Compare Rates.Com.

Letcher has also been tracking which insurance companies the canceled insurance policyholders using his site are coming from. They are: State Farm, 29 percent; Allstate, 18 percent; Nationwide, 11 percent; Travelers-First Floridian Auto and Home Insurance Co., 9 percent; Metropolitan Property & Casualty Insurance Co., 7 percent; Hartford Insurance Co., 7 percent; and Hanover Insurance Co., 7 percent.

The biggest slice of the cancellations is coming from Palm Beach, Broward, Orange, Pinellas and Brevard counties, he said.

Combined, the insurance companies are expect to drop more than 150,000 policyholders in 2008.

Leaving Florida

WFTV reports that Met Life is leaving Florida.

The business says it will not renew many home insurance policies.

If another hurricane hit, Met Life might be out of business.
MetLife said letters are going out to many of its home insurance policyholders in Florida. The company says hurricanes have made it too expensive and risky for the company to continue providing as much coverage in the state.MetLife couldn't say right away how much it's spent in recent years on claims and wouldn't say exactly how many homeowners will not be renewed. They said the changes also affect homeowners in other gulf coast states and along the eastern seaboard.Eyewitness News did find out the company insures about one percent of homeowners in Florida.Two days ago, Eyewitness News reported that State Farm was joining other major insurance companies that have left Florida. The company is dropping 50,000 customers and will not write any new policies after this Friday.Ironically, Kaplan and his wife found a State Farm agent willing to pick them up."I'm not going to forget what happened to me. I have auto insurance with Metro and that may also be jeopardized," Marvin said.MetLife said it will continue to write auto insurance claims, because it's less risky. MetLife also said they will continue to carry some home insurance policies in Florida, but didn't provide details.