UK Authority on claiming extra premium spent
Summary of facts
One of the Claimants, Ms. V, sought damages for two types of insurance handicap. The first type was life assurance by way of mortgage protection. It was submitted that she and her partner had obtained a life cover for their house in late 1998. Upon the infection, the premium increased from £11.61 per month to £24.53 per month and the extra Premium amounted to £284.24 (the “Extra Premium”). It was further submitted that she and her partner had recently remortgaged their house and the new premium was £30.12 per month, an increase of £216.96 annually. Therefore, Ms. V claimed the Extra Premium and a future loss of £216.96 per annum at an agreed multiplier of 17.19, i.e. £3,729.54 (the “Future Premium”).
The second type of insurance handicap claimed by Ms. V was the refusal of critical illness coverage and also possible handicap in respect of permanent health insurance and/or employee benefit. It was submitted that Ms. V has sought a critical illness cover but was refused, such claim was also supported by relevant expert in the insurance industry. Ms. V thereby claimed £3,000 in relation to this insurance handicap.
Decisions of the UK Court
1. The claim shall identify a specific area of additional expense or loss resulting from the unavailability or more restricted availability;
In the case of Ms. V, since she had already taken out the life cover and the facts showed that but for her condition, her premium would not have increased, therefore, the Extra Premium claim was not disputed by the Defendant. However, the Defendant disputed the Future Premium claim. Relying on the joint expert report, the Defendant alleged that Ms. V should be able to obtain other insurance coverage at a lower premium. Further, there was a chance of her cure in the future and a review upon her cure would likely result in better underwriting terms. The Court considered both parties’ submissions and awarded a figure of £2000.
In relation to the critical illness coverage and possible permanent health insurance and/or employee benefit handicap, the Court considered the employee benefit handicap was entirely hypothetical on the basis of present evidence. The permanent health insurance claim was also rejected by the Court as there was no indication that Ms. V was considering or able to afford permanent health insurance. Even though the critical illness coverage was in the realm of hypothetical, Ms. V did seek such cover but was rejected. In the circumstances, a sum of £1,000 was awarded solely for loss in the critical illness coverage.
It is also worth noting that bare assertions that a number of unsuccessful attempts were made by the claimants to obtain insurance may not suffice. Since most insurance is taken out voluntarily, the court might be slow to accept there is a genuine loss without concrete proof. For claimants who had already taken out certain insurance before the injury and the premium had gone up after the injury, this hurdle is relatively easy to overcome by producing relevant documentary evidence.
However, for claimants who intend to take out new insurance coverage after sustaining the injury but are “discriminated” such that higher premium are quoted or applications are rejected outright, expert evidence should be sought to support their case. Further, there is an inherent difficulty to quantify this type of claim. Essentially, insurance is available for people to mitigate risks. Even if the Court accepted that the claimants do suffer insurance handicap, it may be difficult to put a just figure to represent how one should be compensated for the inability to mitigate risks. As we have yet to see any Hong Kong Courts’ decisions on this point, it is uncertain whether the Court will accept this type of claim and if so, how this claim will be assessed.
The law and procedure on this subject are very specialized and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.
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Published by ONC Lawyers © 2014