Insurance companies are easy meat. It’s so easy to paint a poor picture of them when tragedy strikes because you’ve got all the emotion that goes hand in hand with a traumatic event. Everyone loves to call them bastards, especially when you are hurt because they didn’t pay your claim.

The story on Fair Go last night was a case in point.

The pertinent details: Man goes on holiday. Comes home with a sore leg. Turns out its flesh eating disease. Surgeons amputate his leg at about hip level to save his life. Man puts in a claim to Sovereign under his Living Assurance policy. Claim is declined because the man doesn’t meet the criteria.

As many of you know, Living Assurance covers you for a broad range of nasties from cancer and stroke to major head injury and mad cow disease (other companies call it trauma insurance or critical care insurance). There is usually a ‘loss of limbs’ provision too and this is where our Man had lodged his claim.

The wording for loss of limbs basically says that you have to have lost two limbs to get a payout — either both arms, both legs or one of each. As there was only one limb lost in this case Sovereign have declined the claim. Sounds fair enogh, right? Enter Fair Go.

Their story tells of a man in his prime, a keen outdoorsman living in Queenstown, adventure capital of the world. He goes on holiday to some tropical island and comes back with flesh eating disease. Cut to a shot of him hobbling around on crutches and you can feel the emotional strings being pulled.

No one denies that losing a leg is anything other than traumatic. Oh its life changing, no question. And I do feel sorry for the man and his predicament. But to argue for a payment on emotional grounds is wrong. To drag the company through the mud because you feel aggrieved is wrong. In some cases the line is fuzzy and you know what? In those cases it’s been my experience that the company pays something. But this is a straightforward case. There are no maybe’s. You’ve either lost two limbs or you haven’t, mate. End of story.

What happens when a company pays out for things it doesn’t expect? You guessed it, premiums for everyone else go up to offset the cost. Now answer me this — is that a fair go?


About Campbell Hastie

Cam is one half of Auckland based mortgage brokers, The Go 2 Guys.

He makes a living by sharing what he knows about mortgages with people, arranging mortgages for people and then insuring people.

He doesn't claim to know everything about mortgages himself which is why he teamed up with David Mercer — hence the ‘2’ in Go 2 Guys.

He writes posts regularly on his blog and has been told he has an ability to share his knowledge in a simple and sometimes memorable way.

Feel free to comment and ask any questions. Contact Campbell Hastie m: 027 697 7789.

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