Weighing up the fairness of your claims service

In last Friday’s post, I outlined four dimensions of fairness that were relevant to delivering a service like insurance claims, and ended by proposing that a particular feature of motor claims be tested against them. Here’s that example.

The feature of motor claims I suggested relates to when the provision of a courtesy car comes to an end. Many contracts stipulate that the provision of a courtesy car ends when the vehicle is deemed to be a write-off. And the example I’m going to set out is one that I experienced first hand earlier this year.

A third party drove into our car one night whilst it was parked on the road outside our house. The damage turned out to be worse than anticipated and I received a voice message on the home phone around 6:00 one evening from an engineer who, in his words, “wanted to speak to me because it looked like the vehicle was going to be written off”. I rang back the next morning and listened to what he had to say, which was that he would be recommending to the accident management company who had appointed him that the vehicle be written off. It was clear that the actual decision to declare the vehicle a write off was the accident management company’s.

Shortly afterwards, I received a call from the accident repair centre, demanding their courtesy car back. As my wife was driving it at the time, I suggested they send someone later that afternoon to collect it. I was then told that she shouldn’t be driving it, as she had been uninsured to do so from 6:00 the previous evening, being the time, in the accident repair centre’s view, when our vehicle had been declared a write off. After a terse exchange of views, it was agreed that she would be covered for another hour from the time of the call.

The repair centre saw this as a generous concession on their part. Neither I, nor subsequently our insurer, shared that view. It just so happened that on this occasion, the accident repair centre had been dealing with someone with the knowledge and experience to challenge what was an incredibly unfair interpretation of that courtesy car clause. No doubt many other claimants would have fared much worse.

Yet I understand the intent of the clause: to stop claimants of written off vehicles taking a long time to return that courtesy car. However, the repair centre’s interpretation of that clause failed the tests of structural fairness, process fairness, procedural fairness and outcome fairness outlined in the previous blog. And had the very well known insurer with whom we were insured taken a little time to consider how that clause might be exploited by a repairer, it would have saved the compensation it paid us and saved the even greater expense of sorting out the mess. As for my wife’s view of motor claims, that’s not been so easy to restore.

I’m very aware of the pressures that accident repairers are under, but given that it took this repairer several days to collect their courtesy car from outside our house, cost does not seem to have been their motivating factor.

Fairness has become a compliance issue, but its origins are very much as an ethical one. How insurers think about fairness, how they take their tape measure to it, how they respond to what they find: all these are revealing of the values the insurer is presenting to its customers as a key point in their interaction with them. The question this then raises is: are insurers happy with the ethical culture that this reveals?