Insurance claim denied: their word against mine

[Nautonier]

I had my road bike stolen recently, it was locked up outside at work. The bike was insured with bike specific cover, I do not wish to name names at this point. I did all the right things in submitting my claim, one of the requirements being to mail the keys of the lock to the insurance company. Now this is where things went pearshaped. When I purchased the D-lock, which was about 5 years ago, I was given 2 sets of keys. Since then, I have no idea what happened to the second set.

I went into the post office, put my one and only key in a prepaid envelope with a note to the insurer and posted it off. A week later, not having heard anything, I emailed the insurer and enquired whether or not they had received the key. I was told that the envelope had arrived, but with NO key inside. Upon enquiring, there were apparently no signs of damage or tampering apparent on the envelope.

I heard back today that my claim has been rejected on the grounds that I was unable to provide the key to the lock used on the stolen bike. Now, I definitely did put that key in the envelope, I distinctly remember doing it. So essentially it's their word against mine, with me losing out completely on any insurance payout on the bike (carbon frame, full ultegra, worth about $2k).

Has anyone has had a situation like this? Is there anything one can do in these situations? Is it possible that a supposedly reputable company could just skip their responsibilities by telling a good old fashioned fib?

 

[Pastavore]

I'd say that is round one to the insurance company, but not the end of the fight. Have you checked the wording of your policy, is the return of a key listed anywhere in the policy?

I would also complete a statutory declaration stating the details of your sending of the key, and send it to them with a politely worded letter. Privide them with any other evidence that you can think of.


In my experience, some companies will try stalling and delaying tactics in the hope you will just give up, but if you are persistent you can sometimes win.


Good luck.

 

[Minlak]

So keys to a bike lock they don't have the lock or the key?

Go buy a new lock then :-

Hi, I tore my place apart last night looking for the second key to the lock and I have now located it. Send it in this time in a registered envelope with the key securely taped to a piece of folded cardboard. They can't say it doesn't match or they are caught in their own deception.

 

[Nautonier]

So keys to a bike lock they don't have the lock or the key?

Go buy a new lock then :-

Hi, I tore my place apart last night looking for the second key to the lock and I have now located it. Send it in this time in a registered envelope with the key securely taped to a piece of folded cardboard. They can't say it doesn't match or they are caught in their own deception.

If I was going to do something like that, I certainly wouldn't mention it on an internet forum. Perhaps they have some kind of high tech way of examining the wear on the key and its age.

Pretty shit that insurance companies lower themselves to these games/technicalities. Or, I could be completely wrong and a postie carefully steamed open the envelope, thinking that it obviously contained a key to a safe containing zillions of dollars.

They've just offered me a "goodwill settlement" for about half what I would have got with the full payout. I wonder if accepting this settlement will be seen as backing down. If they were so sure they were in the right, why would they offer me anything? I have 48 hours to accept it or not. Do I accept the offer and move on, or continue the fight and potentially walk away with nothing?

 

[AussieBen]

Time vs value of money. Is it worth the hassle? Is it worth your time? If not take it.

 

[Pastavore]

They've just offered me a "goodwill settlement" for about half what I would have got with the full payout. I wonder if accepting this settlement will be seen as backing down. If they were so sure they were in the right, why would they offer me anything? I have 48 hours to accept it or not. Do I accept the offer and move on, or continue the fight and potentially walk away with nothing?

That stinks to high heaven.

Personally, I wouldn't back down, I would stand my ground and fight for it. But it is a risk, you are not guaranteed to win.

 

[Art Vanderlay]

Ombudsman, Consumer Affairs?
worth a phone call..

 

[Nautonier]

Time vs value of money. Is it worth the hassle? Is it worth your time? If not take it.

To be honest, it's not worth the hassle. I have however, completely lost confidence in that particular company and am already in the process of shopping around. I'm not particularly gutted about this particular bike, but I would be shattered if anything happened to my S-Works Enduro or new Spesh road bike and they wriggled out of it. Some things you can afford to replace, others you would be left high and dry. I thought that was what insurance was for.

 

[Wednesday]

Submit a stat declaration stating the obvious points?
Its a legal binding document.

 

[Ohau2000]

Not sure why it would matter, if its locked or not? It was taken without consent? therefore stolen if it was locked or not.

 

[markgab]

Wow what insurer are you with?
Do tell us, we wouldnt want to be in propersition as you in future

 

[teK--]

How can they prove the key wasn't in the envelope. Can they return it to you unopened and without any evidence of opening/tampering? If not then they should cough up. They admit they received the envelope so the burden of proof is on them that the key wasn't in there.

Next stop, financial services ombudsman...

You can also raise an internal dispute resolution case (IDR) with the insurer who often then have to pay a fee to their underwriter to have the case formally reviewed. They hate that. Usually they will pay up or negotiate a settlement.

 

[rearviewmirror]

Sounds like a sh*tty insurance company. Blame the victim, even if your bike wasn't locked they should cover it.

 

[GDonehue]

Okay - having worked for a bike specific insurance company I can tell you that their first response will almost always be to reject if you give that any justification. I do like the option of sending a second key (the one you have just found - pm me if you want a five year old d-lock key).

If what they have offered is below $3400 then dig you heals in and ask to speak to their resolutions officer (they have to have one). Once there explain the issues very calmly, but refuse to just accept a lesser payment. If you are lucky this person has been through enough of these to see a potential double payment hit for them - as this is where the $3400 is coming in. Eventually it will have to go to the financial ombudsman for decision, but for the insurance company to do this requires them to front up $3400 - win, lose or draw. So they have to decide whether it is worth the risk of a payout plus this amount to simply so no to you (and as they have already offered a goodwill payment...). That is my advice anyway.

Also - name and shame! It is the only way they will learn.

 

[silentbutdeadly]

To be honest, it's not worth the hassle.

That is precisely what they relying upon in order to not lose money on the contract. If you don't hassle then you pay the Lazy Tax. Sweet setup, eh?

 

[ForkinGreat]

Okay - having worked for a bike specific insurance company I can tell you that their first response will almost always be to reject if you give that any justification. I do like the option of sending a second key (the one you have just found - pm me if you want a five year old d-lock key).

If what they have offered is below $3400 then dig you heals in and ask to speak to their resolutions officer (they have to have one). Once there explain the issues very calmly, but refuse to just accept a lesser payment. If you are lucky this person has been through enough of these to see a potential double payment hit for them - as this is where the $3400 is coming in. Eventually it will have to go to the financial ombudsman for decision, but for the insurance company to do this requires them to front up $3400 - win, lose or draw. So they have to decide whether it is worth the risk of a payout plus this amount to simply so no to you (and as they have already offered a goodwill payment...). That is my advice anyway.

Also - name and shame! It is the only way they will learn.

+1. I would be interested in what insurance company to possibly avoid. If they are offering you a $1K payout to blow you off, then their actions appear dodgy to me.

 

[Nautonier]

Thanks guys, some really helpful replies. Whilst I don't want to pay the 'lazy tax', my main concern with taking this up a notch is that it will screw me with potential future claims with my bikes that are worth a lot more. The first thing they always ask you is how many recent claims you have made. I made another claim about 3 months ago when I discovered cracks in the carbon frame of my Enduro. They made me take it to Leuscher Teknik to get 'scanned', with the outcome being that it was apparently structurally sound and to keep riding it. After the key incident, I'm sure they probably just pay off LT and get them to say any cracked frame is 'structurally sound' just to wriggle out of paying for new frames. It's no wonder you hear of people 'finishing off the job' with cracked bikes...

After that debacle I took the frame to a Spesh dealer (it's a long story why I didn't do this in the first place) and the first thing they said was "excuse my french, but that frame is f&^ked mate, we'll be replacing that asap".

I'm dealing with Velosure.

 

[mtb101]

don't back down, simple, if you've made an honest claim then you're within your rights to pursue them, if not then they know you'll go away.

for future insurance you can extend your current home insurance to the bikes, of course there's no way you're going to leave/lock up expensive bikes outside anyway so you don't need that level of insurance do you? that's the limitation of owning an expensive bike.

 

[pharmaboy]

don't back down, simple, if you've made an honest claim then you're within your rights to pursue them, if not then they know you'll go away.

for future insurance you can extend your current home insurance to the bikes, of course there's no way you're going to leave/lock up expensive bikes outside anyway so you don't need that level of insurance do you? that's the limitation of owning an expensive bike.

Agree, and checkout mooreys damaged carbon frame thread - current last post on communication with an ABN no, exact reason for disallowing etc

 

[Postal]

Insurance is a total waste of money IMHO especially on a bike.