Why Insurance Grievances Outnumber Other Consumer Cases

We all know how critical people are when it comes to money. But the double standard seems to fall in the industry that operates under the word of promise. It’s all about guarantees.

Non-delivery of flats, cheating and fraud cases by builders, misspelling of loans, disputes relating to house plots, medical negligence – the list could just go on and on for these reasons. But as consumers get increasingly aware and vocal about their rights, there’s no stopping to these grievances finally trudging their paths to the legal courts.

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Why do insurance grievances outnumber other consumer cases most of the time? And if the other consumer cases are also financial in nature, why is it that insurance grievances are consistently at an all-time high?

Firstly, people are really getting more critical about where their money go today. This is being attested by the recent social spending demographics conducted by OECD. More than financial crisis and instabilities in the economic market, people have weathered an affinity towards being more crucial about their financial security.

But secondly, more than the financial sector getting the critical eye, the case of the insurance industry is a specialized one. We have to think about how the industry differs from other institutions. Let’s take into account the case of banking. The difference with banking and insurance, despite both being financial sects, lies on how the services are being operated. In the context of banking, money can be claimed at any point of time. And there are very few scandals that hit the banking industry for the recent years.

To clear the air, this is not the case with insurance industry. It operates on promises of returns. It’s an investment to a time deposit. Therefore, by the nature alone that the need is unquantifiable, people have the greater apprehension on the way the companies would stand for their words. But secondly, it’s also because insurance industry is so vulnerable to corporate scandals. The cases of Lehman Brothers, AIG and Freddie Mac are just small portions in the long list of insurance scandals which stirred the global financial world.

The disparity between claims, approved claims and the weak angles surrounding the two also have an effect on the number of these grievances. For the record, most of the grievances filed were either about unawareness of policy coverage or alleged inconsistencies with insurance premium’s limits. And this number has overwhelmed the customer cases when it could have easily been avoided with a clear negotiation from the onset. Apparently, the indiscreetness of the interpretation of certain coverage and the discretionary claim by the insured provide loopholes in the financial industry that has bred through generations.

The landscape of customer-company relationship is probably too complicated for insurance industry. But at one point in time, the double-standard even accentuates a message to have insurance. Despite all these, the insurance industry remains to be one of the biggest key players in the financial sector. And a minor glitch in the fate of the biggest insurance companies in the world could already affect the financial stability of the market.

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