'My jewellery was stolen and my insurance won't pay out': How to avoid claim rejections

Experts warn customers to read the fine print carefully to understand coverage details

Understanding the details of insurance policies can be challenging. Exclusions and conditions may lead to denied claims. Getty Images
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When FY, who requested to remain anonymous for privacy reasons, was in London during the Christmas break, thieves broke into her hotel room and stole jewellery worth more than Dh10,000 ($2,722) and a watch. The room did not have a safe.

Although she had travel and home and contents cover, Gulf Insurance Group refused to process her claim, saying only “violent crimes” were covered for theft or loss.

“The jewellery and watch were stolen, but there was no evidence of a break-in. But we knew someone got into my hotel room and our suitcases had been rifled through,” FY says.

“As soon as it happened, we went to the reception. They showed us a printout of the room’s keycard transactions and said the only keys that had entered were ours. But they wouldn’t let me have a copy of it, citing data protection policies.

“The hotel also refused to give me CCTV footage or names of all employees who were on duty that night. In fact, they were trying to show that we hadn’t shut the door properly and make us question ourselves.”

FY gave the insurance company a copy of the hotel investigation report, the police crime reference number and email addresses of two hotel managers.

However, she was later informed by GIG Insurance that if the theft happened while she was away from home, it had to be proven that it was a violent theft for the amount to be reimbursed.

“Because I hadn’t stated that in my claim, the company said they could do nothing,” she says.

“What happens if I had walked into central London and someone had pickpocketed me? I wouldn’t have been able to claim because I have no proof?

“I told them there was use of force because someone entered my room illegally. They also used force when they searched through my suitcase.”

Insurance companies need to update their policies as advanced technology can allow people to trespass into a house without breaking a window, says FY. A lot of crimes today are high-tech, she says.

The National reached out to GIG Insurance for comment but the company did not respond.

The UAE’s insurance penetration rate is the highest in the Gulf region but is low by global standards, creating an opportunity for the sector to grow, a February report by Fitch Ratings found.

The credit rating agency expects insurance penetration to further improve, but at a slower pace after the strong growth recorded since the implementation of mandatory health insurance in 2013.

The UAE’s Insurance Authority (IA) merged with the country’s Central Bank in 2020.

The banking regulator is now responsible for regulating, developing and supervising the insurance sector, assessing requests from new insurance, reinsurance and brokerage companies to enter the market and monitoring the financial solvency of existing companies in the sector to ensure they have enough coverage to offer protection.

The IA had implemented regulations governing the life insurance sector in 2020. The rules were aimed to reduce mis-selling of life insurance and family takaful insurance products as well as increase policyholder confidence in the market.

About six in 10 (58 per cent) of 3,600 US adults with health insurance said they experienced a problem using it in the past 12 months because of issues like denied claims, provider network problems and pre-authorisation problems, according to a survey last year by health policy research company KFF.

Eighteen per cent of insured adults said they experienced denied claims over the past year, the poll found.

Meanwhile, Nagarajan T, a professor at Melaka Manipal Medical College faculty of medicine in Manipal, a town in the Indian state of Karnataka, faced a delay in having his home insurance claim processed.

He had purchased comprehensive insurance from the State Bank of India for his villa in Udupi district in Karnataka as it is located in a high-risk area that typically has four months of heavy rain every year. The insurance covered all areas from wall to wall.

Understanding the details of insurance policies can be challenging. Exclusions and conditions may lead to denied claims if not carefully understood
Carol Glynn, founder, Conscious Finance Coaching

“While buying the policy, I told the agency, Policybazaar.com, to demarcate between the structure, additional structure and home contents. They agreed to classify it under separate general home insurance categories,” he says.

“During a recent thunderstorm, a tree fell on my kitchen’s utility area and terrace cover, and it collapsed. However, the insurer said the additional structure was not covered in the policy. They claimed only the house was insured. There was a gap in communication.”

After discussions between the insurer and the agent, Mr Nagarajan got his claim processed but it took longer than usual.

“The customer should be offered clarity on such clauses at the time of purchasing the policy,” he says.

“They should have clearly mentioned the split in insured value between built-up area and wall-to-wall area. This will help confusion.

“For instance, if a customer is buying home contents insurance, it should be split down further to include electronic items, furniture, jewellery and so on. The true value of these items should also be listed in the policy.”

Tarun Mathur, chief business officer of general insurance at insurance broker Policybazaar.com, says the customer raised a complaint with them about the insurer not agreeing to cover the additional structure.

“We raised this with the insurer and internally. We told the surveyor that this is not an additional structure but included in the carpet area mentioned in the policy,” he says.

“Hence, the surveyor waived off the query and the claim was settled.”

While buying a policy, customers should look at the insured amount and the events under which losses are covered, Mr Mathur says.

They should consider the risks in their area and make sure these are accounted for in the policy, he adds.

Watch: How to sign up for UAE's unemployment insurance scheme

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The upsides of having insurance policies are protection against financial loss, peace of mind, risk management, taking care of loved ones and protection of income, according to Carol Glynn, founder of Conscious Finance Coaching.

“The main purpose of any insurance is to provide a safety net against unforeseen financial losses,” she explains. "For home and contents insurance, this means protection against damage or loss due to events like theft and fire. Travel insurance covers unexpected events such as trip cancellations, medical emergencies abroad and lost luggage.

“Knowing that you have insurance can provide peace of mind, especially if you do not have large savings balances to cover unforeseen emergencies. It reassures you that in case of an unfortunate event, you won’t have to bear the full brunt of the financial burden.

“For a monthly payment, insurance allows you to transfer the financial risk associated with loss or damage of property or unexpected travel issues, to the insurance company.”

Life insurance provides a financial payout in the event of the insured passing away. This provides peace of mind that dependents will be taken care of should the worst happen.

A widely under-utilised insurance is income protection or critical illness insurance, according to Ms Glynn.

This insurance can subsidise an individual’s income in the event they are incapacitated and unable to work, she says.

However, the downsides of taking insurance policies include the cost, complex policies and a false sense of security, she adds.

“Premiums can be a significant expense, especially if the coverage is extensive. For some, the cost of insurance might seem high compared to the perceived risk of loss,” Ms Glynn explains.

“Understanding the details of insurance policies can be challenging. Exclusions and conditions may lead to denied claims if not carefully understood. It’s very important to read the fine print of your insurance policies as too often they do not provide the coverage the purchaser expected.

“There's a risk of becoming complacent, thinking you're fully covered when in fact, certain exclusions may apply.”

It is crucial for customers to understand the coverage details. Look closely at what is and isn't covered. Pay attention to the limits of coverage and any exclusions, she warns.

They should also understand premiums and deductibles.

A lower premium might mean a higher deductible, which is the amount you pay out of pocket before the insurance covers the rest. Find a balance that suits your financial situation, Ms Glynn recommends.

Customers should also know the process for filing a claim, keep receipts for all asset purchases or travel receipts in the case of travel insurance and look for insurers with a reputation for handling claims fairly and efficiently, she advises.

“Look for reviews or ask for recommendations to find insurers known for their support and service,” she says.

Ms Glynn believes cultural perceptions contribute to the lower-than-average rates of insurance adoption in the UAE.

In some cases, there might be cultural attitudes towards risk and reliance on family or community support instead of insurance products, she says.

There may also be a lack of awareness or understanding of the benefits of insurance, leading to lower adoption rates.

The perception of risk may be lower, especially in a country known for its safety and stability, which can lead to complacency towards obtaining insurance, she adds.

“The length of time an individual plans to stay in the UAE often influences their decision to invest in insurances,” she says.

“If they don't expect to stay long term, they are less likely to invest in content insurance, for example. Also, for life insurance, people tend to lean towards purchasing this from their home country, often delaying it until they return to their home countries.”

Points to note while buying insurance

  • Understand coverage details
  • Know what the exclusions are
  • Understand premiums and deductibles
  • Know the process to file a claim
  • Search for insurers with a good reputation
Updated: March 07, 2024, 6:03 AM