A 15.5 per cent increase in consumer complaints about insurance last year reflected strong growth in the sale of new and existing products, the Insurance Ombudsman, Ms Caroline Gill, has said.
Her office received 936 complaints in 1998 compared to 810 in 1997. Launching the office's annual report, she recommended that companies selling products or giving information over the telephone should follow up such conversations with written responses within two days. there was not always clarity about what products were being sold, she said. The growing insurance telesales market meant calls were being recorded by some insurance companies in Britain. That issue would have to be addressed.
However, policyholders should make a record of telephone conversations, and she was recommending that companies issue written clarifications within two working days. Callers were often given a generic response, being told they were covered under a particular plan, rather than given specific answers.
In the annual report, Ms Gill says: "In some of these cases, complainants alleged that they underwent expensive surgery on the basis that they were assured during a telephone conversation that cover was provided, only to discover after the operation that cover was, in fact, not provided under the policy conditions . . . I must emphasise that this practice causes a great number of problems involving conflicts about what assurances were given in the course of telephone calls, and conflicts as to whether or not such calls were made."
Nevertheless, policy holders were obliged to understand their policies and to make full disclosure. Sales agents were required to explain the consequences of nondisclosure.
There were 821 cases concluded in 1998, 222 of which were outside the office's terms of reference. Of the 209 written ajudications, 106 were in favour of the companies and 103 in favour of the complainants. The office had a budget of £405,000 (€514,000), half of which went on salary and related staff expenditure.
Motor insurance provided the highest proportion of complaints. Ms Gill said there was a need for policy holders to understand subrogation clauses, which allows the insurer to take over a claim and settle it without conferring with the insured party.
Ms Gill says a "no claims bonus" is better described as a "no claims discounts". "They are not `no blame bonuses', as some complainants tend to believe. If a claim is made which results in payments by the insurance company, the `no claims bonus' will be affected, even in situations where the insured driver is not at fault." The Board of the Insurance Ombudsman of Ireland Scheme welcomed the report, stating that it helped educate people of the importance of customer care.
