Duly assured: free lunch on Sunday

Betting on the future in the insurance racket

Martelarenplein, Louvain (image: Louvain City Council leuven.be).

Upon my last birthday, last September, Frédéric was ill and therefore couldn’t come to my annual last-barbecue-of-the-year birthday celebration. On Sunday, Frédéric (and Richard) were buying (or, rather, not buying) doors in Kortenberg, and decided, their mission having thus far been in vain, they would contrive to render it profitable notwithstanding. My telephone rang.

Now, they say that the age of miracles has passed, but the Lord himself contrived profit by having ensured that I have my mobile telephone on the bedside cabinet (with power in the battery, no less), and that at 10.38 on a Sunday morning. A host of angels might have been lilting me awake on that day.

“Hello,” I groggily mumbled into the—is it a mouthpiece?

The caller announced himself with orders to rise to the vertical, insert myself into the shower and be ready to go for lunch in an hour. I think I mentally saluted, duly illumed the immersion heater for the requisite ten minutes to procure water bearable enough to not evince a brrr as accompaniment to the ablutions, and whipped on a pair of trakkies.

I live 20 miles from Zero Point on the Belgian roads system (the north side of Place Louise in Brussels, for those who are interested), which is but a blip on a cartographer’s theodolite, but a huge leap for mankind’s restaurant availabilities on a Sunday morning. Belgium—thankfully—has no such thing as Denny’s, Wendy’s or anyone else’s from the United Stateses. We hopped into Frédéric’s extremely low-roofed car (it’s helpful if you can practise a few squats before attempting the vehicle-loading procedure—BMW obviously means Bend My Waist) and jaunted into Louvain, where, having driven around a near-empty underground parking structure three times, a spot was selected that was closest to the stairs. Squats, there may be: walking was a no-no. The chosen bays (he edged onto a second in the end) were directly under the stairs up to Martyrs’ Square, with its beautiful 1843 façade to the railway station, the National Monument to whomever it was to—the nation, I suspect—and its God-awful red-brick bus station, clearly designed by a colour-blind post-modernist. The Café de l’Industrie beckoned with its capacious tables, and the Indonesian-looking chappie who was wiping them smiled genially as we took our seats.

I don’t get out that much, so always feel a little abashed when invited by a friend to partake of whatever takes my fancy on a richly adorned menu. “I’ll have the croque monsieur.” “A sandwich?” “A toasted sandwich.” “Comaan …!” Frédéric said in his characteristic New York-ish kind of French-sounding English brawl, “It’s your birthday, have a proper meal!” “My birthday was nine months ago ...” “Yes, but I was sick, so I’m making up for it.” “Oh, well ... I’ll have the filet pur, sauce chacon. Chips.”

We all had the filet pur and, my goodness, it was—I do not joke—the best steak I have ever had in my entire existence. It melted in the mouth before the slightest mastication was necessary. The sauce was unctuous and pleasantly spicy. The chips were crisp and abundant. The company was the crowning glory. One needs friends. (Dabs his eyes.)

The conversation turned to finances, given the fact I was enjoying such opulent hospitality whilst sitting in trainers and a track suit. “I’ve had to pare back all my outlays. For instance, insurance, I’ve cancelled all my insurance policies, except those that I have to keep by law—like for the car.” “Yes, but not the house policy, of course?” Frédéric said, with that knowing side glance that always knows things before it asks. “Yes, including the house policy.” After a few remonstrations, I explained why.

The last two claims on my house insurance were for a lost roof tile and broken seals on my double glazing. The ridge roof tile was noticed by my neighbour who, being at a greater distance from the roof than I am on my own property, drew my attention to it one day. There had been gales a few weeks previously, and this had obviously dislodged the roof tile. A house down the street was having roof works done and I spoke to the contractor to ask if he could come and give me an estimate for repairs to my roof. He duly came and totted up an estimate of around 500 euros. The greater part of the costs would be staging to ensure the safety of his workers. One has in a way to admire that.

But 500 euros is a lot for a single roof tile. The estimate was submitted and the insurer replied that it had not been windy enough. It had, clearly, been windy enough to dislodge the tile (unless the insurer imagined I’d mounted a ladder and wrenched the thing off the roof with my own hands), but not windy enough in Uccle, which is 18 miles to the west, where the Royal Meteorological Institute is located. The claim was refused.

I had the details of a handyman … handy … and I rang him to ask if he could do the job. He came with a pal and a ladder and was up and down in about a half hour. “You weren’t nervous at going up so high?” I asked. “No,” he replied, “This is just a bit of moonlighting that I do. I’m a professional fireman by trade.” Forty euros he wanted. No tax. As it happens, that is less than the excess would have been under the insurance.

The windows story came about when the insurance broker sent out his usual monthly-or-so newsletter, in which he announced, out of the blue, just like that, “If your double glazing is steamed up on the inside, did you know that that is covered by your house policy?” Why, no I didn’t, golly gosh! Well, I have three such windows, let’s get a claim in! So, I wrote to the broker to ask what the procedure was. He ignored it. I wrote to remind him, and he ignored it again. I wrote a third time:

A deux reprises séparées en réponse à ta lettre de nouvelles concernant l’assurance incendie Top Habitation, je t’ai écrit pour plus d’informations concernant cette assurance.

Je suis à ce jour sans réponse de ta part à aucun de ces écrits.

Si ton intention est de me conduire à annuler cette assurance, je peux t’informer que tu as choisis une excellente piste de moyens.

Mais, pour le moment, je continue à chérir une espérance que, quand même, j’aurais dans la huitaine une réponse de ta part à mes communications.

Prouves-moi que ce n’est pas en vain.

This elicited the following response:

I must apologize.

In first instance, i didn’t understand wat you were talking (writing) about.

Now that you specify “Incendie”, I’ve understood.

If you have Opacified windows, send me some photos and a offer for replacement

The long and the short is that each window qualifies as a separate claim and none of them exceeds the excess on the policy. The whole exercise was a complete and utter waste of time. Only if the windows had been the size of the west rose window at Paris’s Notre Dame cathedral would the cost have come within the reimbursable financial window set by the insurer.

I thanked them for their time and effort, and immediately sent a registered letter cancelling the policy quand même.

Whether it was so in real life, the film Erin Brockovich starts with Ms Brockovich wrangling over compensation for a motor accident, at the end of which episode, having been refused cover she asks plaintively, “What is insurance even for?” The agent’s reply is stultifying: “Why, for peace of mind.”

Increasingly, that is all that insurance is indeed for. It guarantees you restful nights of slumber, but only for as long as you do not need to claim under it. At that point, the peace of mind element goes out of the window, opaque or otherwise.

A fellow translator in Bruges regaled me once with a case of obvious collusion between his broker and the insurer concerning widespread flood damage to his home. In the phrase insurance agent, the question of who is the agent’s principal is patent: he is the agent of the insurance company. He sells insurance for the insurance company. He is not your agent. He does not take instructions from you. You are not the source of his riches, but merely of his commission. In a question between you and your insurer, the agent will always side with the insurer, his principal. I’ve never seen one, but it will be set out in black and white in the agency contract: you take our side or else. And that includes the independent experts.

Health insurers in the US, like Cigna, for instance, have been outed by ProPublica and others for pursuing a policy that is probably endemic across the entire insurance business, here, there and anywhere: deny, deny, deny. Doctors employed by insurers to assess medical claims refuse the claims wholesale. They do not even open the medical files; they do not even read a single word of the diagnosis. They simply deny cover: if they state a reason why, that is already the outermost evidence of their medical evaluation of the case. Thousands of cases denied, every single day.

The insurer knows that some, if not all, of these denials are unjustified. Of course they are, how else could it be? However, they know that appealing a denial of cover takes time and effort on the part of the claimant and that the betting odds are in favour of the fact that not every justified claim will appeal. Many will acquiesce in the denial.

Those that do appeal can also be denied a second time, and this will force the claimant into a decision: to raise court proceedings or not. If proceedings are raised, the claimant risks lawyers’ costs, time, worry, other outlays, like experts, travel, and time off from work. If they get judgment, all these things should normally be reimbursed. Less the excess on the policy, of course. Less the exceptions, and the exemptions and the amounts that exceed the policy cover, even with legal expenses insurance. And everything has to be expended up front; only later do you get that back. If you win.

For the more crass cases of denial, you may get an offer of settlement and feel that the whole journey has at least been worth it. But that settlement will be the amount, and probably less than the amount, that ought to have been paid to you under the initial claim, without all the intervening wrangling. In the end, I could have challenged the denial of cover for the roof tile. But who’s going to go to all that trouble for even 500 euros, less excess, when a fireman’ll do it for less than the excess?

Insurers know what peace of mind is worth to an insured party. And they know the fraught worry that litigation brings to an insured party. They exploit these psychological aspects in order to burden the insured to the point of settling below the level that they are entitled to. If you want insurance cover in order to sleep easy at night, then bear in mind that you can sleep just as easily at night without insurance, just as long as no insured event occurs; and if an insured event does occur, your sleepless nights are then probably only just beginning, and may endure for some considerable time—maybe years.

And then, in anger, you will cancel your policy and be freed from the tentacles of insurance, that infamous spreading of risk, which does nothing but impose loss on consumers. That is what insurance does. It does not pool loss, because an insurer never loses anything and the premiums paid by fellow insured continue unabated. Claims affect premium levels, and premiums are not paid by insurers but by the insured. And when their premiums go up, their wage claims or the prices they charge to their customers, depending on whether they are individuals or businesses, also go up, so that the pooling of risk in an insurance pool is simply a means of sharing costs out to the members of society generally.

Including, in the end, the insured who claims under his insurance. And it is the knowledge of that fact that makes insurance into a free-for-all land grab, a bit like in 19th century Oklahoma. Everyone who took part in the land grab had an equal chance, paid an equal premium, but some were able to grab better lots of property than others, perhaps even by jinxing their competing grabbers. In the end, none of the land came for free. It was all stolen, from those who owned it before. What the Oklahoma land grab did was redistribute to new people something that had never belonged to the government in the first place. And that is what insurance companies do. When they pay out under policies, they pay out what is not even their money, it is what they receive as a pool of funds from their policyholders to cover the claims their policyholders make under their policies. But, by denying claims that are valid, the insurer distorts the whole system and pockets what it cheats on for itself. If it cannot pay out owing to the size of the claims, it simply declares bankruptcy. If insurance truly were a pooling of risk, then the insurer should never pay a dividend. Never. If it does, then its actuaries suck. And actuaries simply do not suck.

I’m not pleading poverty, but my cashflow is currently restrained. The simple fact is that an insurance claim would cripple my finances because I simply couldn’t afford the excess. If I claimed on the insurance policy, I’d first need to expend the repair costs, and bear the excess, which I can’t afford. I am better off if I simply cancel the insurance, sustain the loss occasioned by the event, and make good the loss as best I can with the premium I have thereby saved, which is itself 500 euros a year.

Sunday’s was a free lunch. There really is such a thing. Meanwhile, my house policy still runs till November and I have till then to decide what company I will renegotiate cover with, if at all. I think I’ll move to a smaller house.

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For further rumination on obeisance to recognised rights and wilful disregard for the known law, see: