The insurance industry might seem rather boring to the untrained eye, but rest assured that drama is abound in the field. In fact, the insurance industry has long been the subject of a dramatic invention by writers. For example, one of the classics of the film noir era, Double Indemnity, followed an insurance salesman toying with fraud. Insurance is, after all, concerned with risk – and what is more fascinating than that?
The insurance industry is constantly evolving. Here is a quick roundup of some of the news emerging from the world of insurance.
Refunds For Pandemic Drivers
At the height of the pandemic, many people were driving significantly less than they usually did. People working remotely were commuting less. Less social events were taking place that required driving. Overall, people traveled less. That didn’t stop auto insurance companies from charging the same amount of money for coverage – often coverage that was deemed unnecessary by customers. Customers were still paying premiums that were in excess of their potential accident costs. How could they have an accident if they were not driving?
Because of this, three insurers were ordered to make premium repayments by California Insurance Commissioner Ricardo Lara. In practice, this meant that drivers in the sunshine state could expect to see some kind of reimbursement for any premium payments made during the ‘stay at home’ orders imposed by the Governor. It is expected that insurance companies will comply with Lara’s order instead of taking legal action against the state.
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Regulatory Action In The UK
Insurance companies in the United Kingdom could face regulatory action if they do not start to offer customers more value for their money. Researchers found that loyal customers were not correctly rewarded for their continued custom and were instead charged more than they would if they had continuously switched providers. The Financial Conduct Authority – a branch of the UK government – issued a stark warning to insurers about future regulatory action if more transparency was not forthcoming.
Chief among the problems highlighted by the Financial Conduct Authority was the fact that renewing customers were often given higher prices than new customers. This meant that customers received incremental financial punishment for not switching constantly.
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Fraud Ring Broken In California
A huge auto insurance fraud ring has been unearthed and broken in California. A multi-agency operation dubbed ‘operation dealer’s choice’ uncovered the large fraud ring, costing insurers upwards of 800,000 dollars. Dealers would deliberately purchase damaged cars and then claim on insurance policies as if the damage had been caused while they were in charge of the vehicle. Investigators discovered a total of 45 fraudulent auto insurance claims made by the ring. A total of 32 defendants have been charged in relation to the fraud.
Suspects staged crashes, faked thefts, and provoked malfunctions in order to claim on insurance policies that they had taken out while in the knowledge that the cars were already damaged or at the end of their lives.
