Coronavirus Covid-19 Insurance Advice – Will Claims be Declined?


March 31  

The world finds itself in the grips of the pandemic COVID 19, otherwise known as the Coronavirus. The financial implications are only now being felt where their true impact will only become apparent after the virus is brought under control.

We are already seeing large financial institutions readying themselves for the onslaught of this incredible financial impact both as a way to profit, which we are seeing through the government backed business loan scheme, where the lenders, and especially the big banks, are taking the opportunity to profit from the scheme and not as Boris intended in his rallying call ‘to stand together as one to come through this’. However, history always shows that the banks do one thing very well and that is look after themselves.

The other area the suppliers of financial services are looking to, not so much profit from but reduce their losses is by using small print in the dusty parts of agreements and contracts to avoid paying out against any claims. These claims fall into two categories:-

Claims for Loss of Money 

If you have paid for goods and this is a relevant example in relation to holiday bookings and the payment was made by credit card ordinarily a claim under the section 75 of the consumer credit act can be made. In addition those, who are not necessarily legally protected, used to also be able to make claims if payments were made from a bank account via a debit card. We are seeing through enquiries from new clients that certain technicalities are being relied upon by lenders and providers of credit cards and bank accounts to avoid making payment.

It is vital if you have not received or are unlikely to receive the goods and services that a payment you have made can look at being reclaimed. This may by the very volume involved take some time and could escalate through to the financial ombudsman which we know is the case with some clients we represent.

Claims against Insurance Policies

The other area that insurance companies primarily, but also banks who operate travel insurance through say a package accounts are looking to save money, is by declining claims made against the policies they have in place. These policies will no doubt include travel insurance as we are seeing a catastrophic end to all travel and holidays certainly for the foreseeable future. The same also applies to businesses where there business disruption insurance is not paying out following claims in relation to the virus Covid 19.

However, we are also starting to see clients approach ourselves concerning companies that are declining life policies, pet insurance and no doubt, car policies and home and contents insurance. These are not necessarily linked to the virus and the reason for declining the claim. However, with the financial pressures that the banks and insurance industries are facing they will clearly try to find clever ways to avoid paying any policy if they can. In doing so this saves them huge sums of money.

Types of Insurance Policy

Travel Insurance

Initially with the onset of Coronavirus this was the first major industry to be affected which almost overnight ended all forms of foreign travel and holidays both home and abroad. Advance bookings on credit cards or debit cards can potentially be claimed as can claims be made against firms that are regulated by the travel industry and against insurance policies for this very occurrence. All individuals are in the economic fight of their lives and need to make sure that any payments made for goods or services are claimed. As individuals we need to protect our financial interests and do so regardless of the hurdles and difficulties that we are seeing some of our prospective clients face but in claims of this nature.

Life Insurance Cover and Whole Life Cover

Whilst the loss of any human life is tragic, in relation to the number of people who die each day Covid 19 isn’t necessarily catastrophic as far as the insurance industry is concerned. However, as a whole they will look at any claims from now on with a view to challenging if at all possible regardless of whether they have any reference to Covid 19 resulting in the death or serious illness that results in the claim.

Indeed it would be a PR disaster for these firms if they were to refuse insurance claims for those who sadly passed away as a result of the Coronavirus. Instead the insurance firms more than likely to tighten up payments and challenge claims all of the other policies that they provide.

Business Disruption Insurance

Businesses will and are struggling now! This will only get worse and all of the small medium sized businesses as well as those that are large will be affected. The disruption caused to them by the Coronavirus is across the board making no exceptions to those businesses that were strong or weak and regardless of industry. Some businesses such as travel, hospitality and most retail have suffered catastrophic effects already closing many if not all of these businesses. The next wave of business to close or to have serious fallout, will be those who on the face of it wouldn’t be affected by the slowdown but will be as the products and services that they provide be unable to be provided by other businesses which have been affected. 

I read an interesting story about a table tennis manufacturer who’d never been busier posting record sales for the month of March. However, despite the huge list of backorders and with 40 staff is unable to keep the business going as he cannot buy the supplies which originate from abroad due to the lockdown in those countries and restriction on travel.

Cases will arise where businesses require the assistance of the insurance that they have in place and have paid methodically paying over years but will no doubt be declined probably under the heading of ‘force majeure’. Again it is essential for any business who is affected by a claim which is declined to challenge this and seek a resolution. No business should accept the claim is declined in this way and regardless of the time that it takes and apparent complexity dealing with an insurance company any negative decision should be challenged.

Car, Pet and Home Insurance

It is likely that insurance companies will also try to look at ways of invalidating policies in relation to cars which may be parked on the road, which is against a policies condition, the reason being is that we are not used to all our vehicles being at home at any one time. Pet insurance may be challenged as vets are cutting back on regular vaccines and this too could invalidate pet insurance claims. Likewise home insurance policies, do these cover you working from home? which we are all being as today. As an industry the insurance companies will look at any claims and trying to find any way of avoiding to pay. It is essential that if you have a claim you see that claim through and if it is declined as we are seeing with clients that we are taking on a present the decision to decline is challenged. 

Financial Survival

As individuals we are all in the financial fight of our lives whether you have seen any impact yet or not. This is the case with the financial industry and from what we are seeing both their inability to comply with the government’s request to introduced finance into the economy through businesses, they are going into their old ways of profiteering and minimising their own losses. As individuals we must stand up against this and challenge any negative decision that they make. As we seek to recover what is rightfully ours.

What is in store?

We are all turning on the TV at the moment, for the daily onslaught of news and updates with regard to the spread of the virus in our own area, country and around the world. The economic impact has been felt already by so many but with the measures brought forward by the Chancellor this will at least delay the impact from many for several months. But there will be a significant realignment of our economy and the way we conduct ourselves in society in the future.

Banks and Insurance Companies

The banks and insurance companies as well as all financial institutions are a vital part of our economy or at least they were. However at times of need they should be providing as the Chancellor of the Exchequer has demanded support for individuals and businesses. Even at these early days we are seeing from our clients who are approaching that this is clearly not the case. As the days, weeks and months roll forward, we have no doubt that the number of cases that we have to deal with in relation to the financial skulduggery of these financial institutions, who are looking to profit and reduce their own losses to the detriment of the individuals, will increase.

Individuals and businesses need to be focused on protecting themselves in the same way we will fight for our clients who approach us to defend their financial right.

Please stay safe and well.

Martin Knipe

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