Important changes mooted to insurance law
We all need insurance for a multitude of reasons, some compulsory such as car insurance and employers liability, and others to cover the eventualities of life such as health insurance, life insurance, home contents and so on. But many of us have also faced the frustration that when it comes to the need to make a claim on an insurance policy, this can be easier said than done. Insurers of course know that they have the power in this situation, they are simply too big in many cases to risk a court case if they reject a claim in it’s entirety or aspects of it.
As against this, fraud in insurance claims is a also a big issue, particularly when it comes to personal injury related claims, so a balanced approach is needed.
On balance, we think that proposals put forward by the Law Commission do represent a better starting position for insurance claim law than is currently in place, subject to insurers getting their act together with fraud prevention which is a scourge for the vast majority of honest individuals.
Under the new proposals the starting point would be that if insurers delay or fail to pay a valid claim they would be entitled to compensation. In other words, the primary obligation of insurers would be altered from preventing loss to the insured to paying valid claims after a reasonable time.
