Insurance Law notes from earlier this year
Sunday, July 23, 2006 at 10:34AM (These notes were originally posted elsewhere on my website)
"Shop Around for the Best Insurance Cover"
For most people, in practice this means seeking the cheapest contract.
Like the related slogan, "cut out the middle man", this is one those phrases that can make you poor.
For some years now, I have sought to exploit this by promising to provide insurance at less than the cheapest quotation obtained elsewhere. There has been only one caveat: I will pay out no claims at all.
Perhaps unsurprisingly, I am still waiting for my first customer, and that is the way it will stay. Mind you, I have had to fend off some insistent people who seem to have some peculiar ideas of the purpose of having an insurance policy.
Insurance is arguably the most complex contract that we make on a regular basis. Even if all policies were the same - and they are far from being so - they would be difficult to understand, even for lawyers. (If it were otherwise, insurance premiums would be impossibly high). There is no insurance that covers everything that might happen to everyone. Even to benefit from the cover that is promised in a particular contract, a policyholder has to avoid some mistakes in starting the policy and making the claim.
It's not "rocket science" if you are careful and knowledgeable; but the same applies to rocket science.
Ideally, we should all use experts to select our insurance. They are called insurance brokers and their job is to ensure that we get the risk protection that we want at the best price.
Instead, in a crazy drive to be more "penny-wise, pound foolish", we gravitate to the lowest-price offer.
Sadly, the Irish Financial Regulator's presentation of its latest survey of consumer insurance costs feeds this further. That is not the intention, but it is an entirely predictable result. Few members of the audience, and probably none of those consumers who need to do it, will access the full report (at www.ifsra.ie) which is commendably clear on the proper weight to be given to price.
(I have no family, personal, social, commercial or professional connections to any insurance brokers).
Posted on Saturday, March 11, 2006 at 10:52AM
An Exception to Uberrima Fides
My attention has recently been drawn (by the excellent Cameron McKenna website www.lawnow.com) to a decision of the English High Court which confirms that, in certain well-defined circumstances, a failure to disclose the real identities of those seeking insurance does not amount to a breach of the duty of utmost good faith. The case is Talbot Underwriting v. Nausch Hogan & Murray [2005] EWHC 2359 (Comm) and is available on www.bailii.org.
The exception is known as the "undisclosed principal" one, and I have to admit that it was new to me. I am still studying the decision, and I expect that I will have more to say about it in due course.
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