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Insurance costs to rise after Supreme Court ruling: Insurers

Insurance costs to rise after Supreme Court ruling: Insurers

Insurance costs to rise after Supreme Court ruling: Insurers Insurers have criticised the recent Supreme Court decision that allows “collateral lies” in insurance claims, saying this could drive up costs and delay the pay-out process.
 
The Association of British Insurers (ABI) said that insurance policies may become more expensive as a result of the court ruling, which declared that lies immaterial to an insurance claim should not be rejected.
 
“This decision risks pushing up the cost of insurance and prolonging the pay-out process for the vast majority of people who are honest customers,” said James Dalton, ABI’s director of general insurance policy.
 
Quoting the lone dissenting judge in the court decision, Dalton said allowing lies will “distort the claims process by the time and cost involved in unveiling the fraud and attempting to ascertain its true implications.”
 
He called the ruling “a blow for honest customers” that opposes the industry and government’s crackdown on insurance fraudsters.
 
“Lies are lies. Insurers will investigate all suspicious claims and we make no apology for doing so as it keeps premiums down for honest customers.”
 
In an earlier statement, Dalton also said that the industry will study the decision carefully.
 
Voting 4-1, the Supreme Court ruled that people who have lied on their claims should still win payouts.
 
Changing one of the most crucial principles in insurance law, the high court said that “collateral lies” that are immaterial to the claim do not affect the policyholder’s rights to be compensated.
 
The ruling was made for a particular case involving a Dutch cargo ship, which was damaged in 2010 by a flood in its engine room.
 
Earlier court rulings – now overturned by the Supreme Court decision – ruled that insurers did not have to pay out the insurance claim because the ship’s owners lied about the crew’s activities on the day of the incident.
 
 
Related stories:
Supreme Court: Collateral lies OK in insurance claims
7 million UK drivers lie to get cheaper insurance: Survey
 
1 Comments
  • ACONLON BA FCII 21/07/2016 10:01:07
    Insurance ACT 2015
    Post a reply