In the spirit of CROSSHIRE
Rental Rate Roy bemoans what he considers to be a modern version of highway robbery.
WHAT PRICE INSURANCE?
In days of old, highway robbery was undertaken by individuals on horseback wearing masks, with bags for their swag and flintlock pistols in their belts. Today, it is much different, with the robbery no longer done on the highway. My ire is directed (for this issue of EHN at least) at the purveyors of that necessary evil which helps us all sleep at night, but for which I feel to be increasingly ripped-off: insurers.
There has been a change in legislation whereby insurers need to make provisions for potential claims for longer. This has resulted in a significant impairment on their profitability for which, you guessed it, someone has to pay - and we are that someone. Added to this is a dramatic increase in IPT, aka Insurance Premium Tax, which is not reclaimable and recently increased from 10% to 12%.
I have direct experience of this matter as our insurance was due recently. We went through the rigours of fending off shiny-suited, open-necked-shirt spivs arriving in flash vehicles, promising the earth and failing miserably to deliver. As I gallop headlong toward senile decrepitude I have become a creature of comfort. I like to get to know my insurance brokers and want to build up a rapport with them. We have an excellent broker and we think very highly of her skills. Nothing is likely to turn me off faster than some fast- talking goon with the capability of walking under a closed door wearing a top hat, who has little interest in my business, but sees us as the commission payment toward a new pair of Ray-Bans or Calvin Klein underpants.
Our insurance is a significant cost to our business. Our claims history is average. We’re not the worst, but neither are we the best. We don’t make frivolous claims, in fact quite the opposite, and tend to not claim when we have a genuine reason to do so because of the bigger picture. So I take it personally when our broker goes away to negotiate on our behalf to then return somewhat shame-faced with an increase of 20% in our premiums. Yes, you read that right: 20%!
Years ago, we had an incident which opened my eyes to the way the insurance industry works. A cash customer hired a micro digger to do some work in his garden (this was in the days before we offered a damage waiver insurance scheme). The one-day hire went well and all was sorted and paid for. Later in the week, he phoned again requesting the same
machine for only two hours to finish off the job. Our Hire Manager agreed a special half-day rate as we had one idle in the yard. Imagine my dismay when, two hours later, we are called by the customer’s friend advising there has been an accident and the client had been taken to hospital.
My team and I rushed to site to identify what had happed, to find that the customer (whom I subsequently concluded was from the shallow end of the gene pool) had scraped-up a mound of topsoil to the end on his garden to a height of 1.5m, then taken it upon himself to drive the machine onto this loose earth with the tracks in the narrow width transport position. It subsequently tipped over onto its side, trapping him and breaking his leg. Numerous photos were taken, the machine removed from site and a comprehensive report written.
Three weeks later, a recorded delivery letter arrived on my desk from a ‘no-win, no-fee’ solicitor advising that the customer was suing us for personal injury and: (1) failure to correctly train him, (2) for supplying equipment which was unfit for purpose, (3) for equipment which was faulty, (4) for the state of the economy, (5) the price of the pound, (6) the lack in size of his wedding tackle - you name it, he was claiming for it. Thankfully we were totally in the clear, and the claim rebuffed. However, my eyes were opened by the fact that there really is no such thing as no-win, no-fee, because solicitors take out insurance policies to protect themselves from any losses. So, in an obtuse fashion, the insurance industry is shafting itself!
But where is this cost being recouped? You guessed right again old chums: from US, the premium payers whose insurance costs seem to ever increase with no discernible rise in cover or performance. Oh, and just as an aside, we never did receive payment for the half-day hire either. However, after much wailing and gnashing of teeth - as well as changing our methods of working - we have mitigated our insurance premium down slightly, but I fear that my long-held plan of owning a Spanish villa must be put on the back burner for at least another year.
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