Wednesday, 22 February 2012

Compensation Culture Kills

In my last post, I wrote about some possible changes in the UK insurance industry. The post was prompted by the news that the prime minister was meeting with representatives of the insurance industry to discuss rising policy prices.

One of the things to have come out of this meeting is that the insurance industry is becoming more weary, perhaps fearful of the rising compensation culture in the UK.

For once, it seems that the insurance industry and I can find some common ground.

For many years now I have been aware of the compensation culture that is beginning to hold a grip on western society, particularly the population of North America.

The majority of these claims are to do with small road accidents, those where two cars have collided at a speed under 30 miles an hour. As is the design of the seat belt fitted in most modern cars, even the smallest bump can lead to mild discomfort in the neck. In times gone by, these little niggles would be shrugged off, but compensation culture and the ambulance chasing lawyers that fuel this particular economy will instantly see a claim for whiplash, a claim worth upwards of £1000 to the claimant and far more for the successful legal firm.
It is the cost of these sorts of trials, perpetuated regardless of any real claim of negligence, that is driving up the cost of insurance. Government money, or more to the point, tax payers money, is also taken out of the system by the use of legal aid.

Another cost of this sort of case is that a court of law that would usually be working hard to rid the streets of "real" criminals are swamped with these trials, and the strain on the system means that said "real" criminals are still on the streets. How many times have we heard of a criminal committing a crime while awaiting sentence for an earlier offence!

Another cost of this culture which goes almost unnoticed by the majority is the cost on orgnisations such as the NHS. In the financial year of 2010-2011 the National Health Service handed over more than £1.8billion in compensation claims to the British public. While some of these claims may have been genuine, my cynical mind has me believe that many, if not a majority, will have been false or elevated claims.

In one particular case, a man was granted more than a million pounds because his doctor had prescribed a drug not knowing that the defendant was allergic to the main ingredient. The man had clearly suffered injury, but as much as was initially claimed, we will never know. This, like so many other claims never had its day in court, and was settled prior to defence lawyers being involved. On the one hand, it does reduce the cost to the NHS if a legal battle had resulted in them losing. But on the other hand, giving money blindly without putting up a defence will surely pave the way for other, in some cases less worthy claims to be presented in the hope of an early settlement. And while this continues, the cost to the National Health Service will only increase.

I wonder what the human cost, through lost beds and closed or understaffed hospitals is, and how much better spent that £1.8billion could be.

Wednesday, 15 February 2012

A Change To Insurance Policy

I would like you, every single one of you that reads this to give me £200. In exchange for this money, I will guarantee that if, during the course of the next twelve months you happen to be in the extremely unlikely position of being punched in the face by a man called "David", I will give you some, all or more of the money back.

There are, however, certain rules. This offer only extends to being punched in the face by people that have "David" as their name on their birth certificate. No contractions (such as "Dave") can be included, neither can any foreign equivalents.

If an incident should occur, but it is discovered that you started the argument, there will be no payout. If it is discovered that you were in a position where it was more likely for an incident to take place (such as closing time at a bar holding a David Convention), no payout shall be awarded.

If, at the end of the twelve month period, you have not been punched in the face by a person called Dave, none of your money will be returned. However, I will offer the same guarantee for the following year at a cost of only £199.

If you refuse this offer, I will see to it that a law is passed preventing you from frequenting any place where there is a possibility of meeting somebody called "David".

Sound familiar? It is an extreme example I know, but this is exactly what insurance companies all over the world are doing every single day.

Long time readers of this blog will know that I have posted on the subject of insurance before, and know that I am somewhat against the idea of paying somebody hundreds of pounds for a "what if", and having none of the money returned in the event of the "if" never coming to fruition.

It was reported in yesterdays papers that the Prime Minister and other Cabinet members would be meeting with representatives of the insurance industry to discuss rising insurance premiums. In a time of recession, the last thing the British public want is to be in a position where they are forced by law to throw money at something that is almost always completely intangible.

Personally, I would very much welcome a change to the insurance industry, or even a change in policy regarding how insurance works and how the money is taken.

In Australia, where I currently reside, a lower grade motor insurance is rolled in with the road tax system. This method means that when you pay the tax premium to put a car on the road, a high percentage of this money will go towards a third party insurance policy. This policy does not cover the vehicle for theft or fire, but if somebody were to have an accident resulting in injury or death of themselves or a third party, the cost of medical expenses is covered by the motoring tax. If you wish to have the additional benefits of a full insurance policy, then you are able to do so by taking out a policy with an insurance company, but this is above and beyond the minimum insurance requirement. It is a system that works because so long as the road tax has been paid for the car is covered and legally allowed to use the roads. I say the car because once the car has tax, anybody with a legal drivers license can drive the car on Australian roads without the need for additional insurance. How do the authorities know that a car is insured? This is very simple. Paying for road tax is the only way in which you can have number plates put on the car. No silly bit of paper in the windscreen that the authorities have to do a close inspection on!

Another proposal that I would like to see considered, and potentially a much fairer system would be the following. Instead of lowering the insurance premiums for motorists, increase them, and by a substantial amount but with the guarantee that if you do not have an accident or make a claim during the duration of the policy, the money will either be returned in full (less any administration charges) or it will be rolled over into the next insurance term. This way it becomes more of a promise that a driver will drive carefully and do their utmost not to cause danger to other road users. As an addition to this system, I would like to see the premiums revoked from drivers that are caught speeding or drink driving, as this breaches the terms of the insurance (the terms being that the driver will do their best to not intentionally cause harm to other road users).

I will be watching with great interest as this story unfolds in the UK, and may put together a few more posts on the subject in due course.

Do you have any ideas on how to make the insurance system fairer? Have you been overcharged by an insurance company, or taken out a policy only to find that the insurance is annulled for reasons beyond your control? Why not share your thoughts in the comments section below.

Friday, 10 February 2012

Getting your own back on delivery companies

I doubt that there is a single person reading this blog, or even anyone of my age in the Western world that hasn't been in this situation. You've ordered something from an online store or an actual shop (how 20th century is that), a shiny new TV, a new fridge or freezer, maybe even a new sofa. The shop has taken your money and promised delivery on a certain date, but they can't specify a time except to say that it will be delivered in business hours. You've argued and pleaded with your boss about getting the day off work even though there are meetings and deadlines to be taken care of, and said manager has eventually folded and let you have the time off as long as you either make back the hours or take the time out of your holiday allowance.

Delivery day comes. It's only 9am but you have already been up for hours excited about your new toy. You've vacuumed the entire house because the bearer of your gifts is bound to judge you on the state of your home. You've made sure that the smell from last nights curry has well and truly gone, courtesy of your favourite brand of air freshener. You've made all the space you need in your living room or kitchen to make it a little easier for the delivery driver to place the item where you want it.

It's midday, This Morning has finished, and the Jeremy Kyle show has just started and your wondering if you should risk making lunch as your item is bound to turn up just as you tuck in to your cheese sandwich. You decide not to risk it.

Three o'clock, and you have started to think about calling the delivery company to find out when your item is going to be there. The kids are going to be home from school in a half hour and you wanted to play with the new toy before they got their hands on it.

Four o'clock and now you're starting to get a little panicked. You want to phone them, but hold off as you know that the driver will be phoning when they arrive and you don't want to miss the call. They're only around the corner, they'll be here soon, surely?

Five to five, and the phone rings. A leap of joy has you racing to the telephone, but the person on the other end doesn't sound like they mean business. In fact, they are only calling to inform you that they wont be able to make it today. If you are available, they can come tomorrow, but if you are not, then it will have to be a later date. You can't possibly take another day off, the meetings you missed today have left you with an extra workload which has written off your entire weekend and Kirsty from accounts has lost the file you gave her with all the customer details.

You've lost a days holiday or a days pay, and for what? Absolutely nothing. Nada. Zilch.
Delivery companies take advantage of the fact that you will wait for them to deliver, knowing that you have already paid for the item and need to be in the house when it is delivered. They've already been paid, so it makes no bones with them if they don't deliver on time. Most of them don't even work for the companies from which you bought the item. There's nothing you can do about it, right?

Well, is there?

A well worded complaint will usually see an apology from the delivery company, but they will not reimburse anything for the time lost, and the response they send you will usually be a fairly standard one allowing them to apologise without ever properly reading your complaint.

But how about this. Instead of sending a huge ranty email telling the company how disappointed you are with their service, simply send them an invoice for the time lost. For instance, if you usually work an eight hour day at £30 an hour, send them an invoice for the £240 that you would have earned had you not been at home waiting for them. In the email or letter that you send accompanying the invoice, explain that you feel you should be reimbursed for loss of earnings as your company will not give back your day off. At the bottom of the invoice, include a line about the payment needing to be processed within 28 days of receipt.

Of course, I can't guarantee that it will work. But with enough people,  it may just make the companies more aware of how fed up their customers are and start a change in the industry.

Have you had problems with a delivery recently? Please share your story in the comments section below.

Sunday, 5 February 2012

Herbie goes to the scrap yard

When we first arrived in Australia, it was like starting life again. We didn't have a place to live, nor a car to get us there. We managed to sort out the flat fairly quickly, but the car was to prove a little more difficult.

To get a roadworthy vehicle in this part of Australia for a decent price takes a lot of looking. Eventually, after scouring the Internet for what felt like an eternity, we found a car that was in our price range. An ancient Hyundai in a faded blue colour. Power steering, air conditioning, CD player, five gears, these are just some of the things that weren't included, but since our budget was low, and our need high, we handed over the money and drove away confident that the car would do us proud for the time that we needed it.

Over the course of the next few months, the car behaved well, answering all of our requests with not so much as a misfire. But a misfire was what it eventually developed. We were on the way back from a day out in Rockingham, about an hours drive from the flat and a great location for watching dolphins out at sea. The car felt like it had no power whatsoever, and then started bunny hopping, which is really not what you want on the freeway. We managed to limp the car home, and left it outside the flat. The next day, I tried in vain to start it but the car wasn't up to the challenge. It seemed that all was lost.

It was quite a while before we managed to get a mechanic to look at the car, and the news wasn't good. The distributor had basically rusted through, and needed replacing. Along with the distributor, all four of the spark plugs would need replacing, as would the battery. We spent some time deliberating over whether to get the car fixed, or to cut our losses and consider the endeavour a lost cause. Eventually, we decided to hand over the money and get the car fixed. After two hours, the car was finished. I jumped in, turned the key and... LIFE.

For the next few months, we drove everywhere. We took Sunday afternoon trips to see dolphins. We went on late night drives to see the city lights and the stars. I even took my girlfriend for a driving lesson in an empty car park. Most of all we went shopping, a chore made so much easier without the need to carry the bags home.

After a while, the car developed some quirks. For instance, every now and again, the dashboard lights would fail due to a blown fuse. The odd thing was that by turning on the rear heater, or pressing on the brake pedal the dashboard lights would come back on, despite being on a different circuit (according to the user manual). It was at this time that we named the car Herbie, since the car seemed to have mind of her own. With a name, Herbie began developing even more little traits such as losing power after driving for more than half an hour at 100kmh requiring us to pull over for a three minute breather before going on our way as if nothing had happened.

We had been driving the car a few months when, one Sunday morning, we decided to take the half hour drive up to one of our favourite pubs. We'd been out the night before and a pub lunch was an absolute must! We were driving along the freeway without a care in the world, and the car was running great when I saw a flash in the rear view mirror. A police motorcycle was pulling us over. This is not that unusual given that I have been pulled over more times in six months driving here than I had ever been pulled over in the twelve years previous.

Something about the way the policeman walked to the car told me that he was in a bad mood. This was confirmed by the way in which he spoke to me. He started looking around the car, and asking questions about some of the “features”, writing notes on his pad, and generally looking troubled. After a few minutes, he issued a yellow sticker, otherwise known as a compliance notice, an order to get the car fixed within ten days or get it off the road. We were distraught, as was the car. For the rest of the day, Herbie was acting a little slugish. Every time I went out to the car I expected her not to be there, having slunk off to die on her own.

For all her quirks, her breakdowns, her faded bodywork, we had come to love her. But after a long discussion (not within earshot of Herbie as we didn't want to kick her while she was down), we came to the only decision that our bank accounts and common sense would allow. This, unfortunately, was to be the end of our relationship with Herbie. No more long drives and late nights were to be had by the three of us.

Some of the times we had with Herbie were bad. Some were good. But most importantly through all of the 10,000KM that we drove her, they were never short of interesting, and I'm sure we will look back on those times with great amusement. But in the end, we had to let her go.

Herbie – 1992 – 2012