Reply to post: Insurance Companies

Cyber-insurance shock: Zurich refuses to foot NotPetya ransomware clean-up bill – and claims it's 'an act of war'


Insurance Companies

Early in my career I worked for a large UK insurance company as a phone jockey and then a back office technical advisor (don't hate me I left the profession 15 years ago due to seismic shifts in the way it operated). More reject on spec and squeeze claims down to the bare minimum,

e.g. Claiming the claimant didn't have a sufficient sum insured and then paying a pro rata fraction of the amount the claim was worth. They facilitated this by getting the Loss Adjusters to inflate the cost of the claimants possessions and rebuild costs.

Since i was primarily dealing with large fire/water damage claims I found this repugnant since I was the appointed contact at the insurer for this type of stuff. Initially it was fine since I had the delegated authority to override the LA but this was reduced at my yearly audit the year before I left. When they started asking me to upsell on live claims I decided that was it, I wasn't helping people anymore.

The "act of war" definition applied to this claim rejection will be difficult to substantiate in court and any good lawyer should be able to knock it out to the point of gaining at least 50% - 80% of the settlement. The insurance company is banking on this, tell them "no", put the ball back in their court and see what they do. This is classic on large claims.

E.g. A recently published story in the UK about a homeowner who lost his £400,000 home to fire. The LA came out and rejected his claim on the basis he had declared at application he only had 5 bedooms. The LA decided he had 7 despite the fact the two extra rooms were too small to be considered bedrooms under local government guidelines. He went to the Ombudsman and lost (since the Ombudsman is essentially operated by the financial service companies). In court he would have no problem getting that overturned but its easier for the insurers just to say no and get the Ombudsman to back them on the more expensive stuff. This would have been considered a large claim so the insurance company would be looking for outs from the get go.

I know that home insurance and £100 million malicious IT damage claims seem worlds apart but the principle is the same. Always.

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