Claim denied: A lawyer's musings on the shortcomings of insurance
As lawyers, many of us either fight insurance companies or represent them. Sue or defend, we are all connected with insurance by buying it. When did the concept of insurance start?
It’s commonly suggested that insurance originated with Babylonian King Hammurabi around 1750 B.C. He encoded the concept of “bottomry,” in which a merchant, for a few shekels more, would not have to repay his creditor’s loan unless the ship arrived safely.
I am not sure why it’s called bottomry. Given my experiences litigating against insurance companies, the term likely related to an exclusion for coverage. The merchant whose stuff never arrived would plead with the creditor to forgive the loan and the creditor would balk, saying, “Can you prove your merchandise ended up at the bottom of the sea?”
My first experience (prelitigation) with insurance was in Montreal when I was about 7 or 8. A pesky life insurance agent, one Jean-Pierre, came to our house trying to sell my father a policy. He gained admittance to our house by gradually gaining our confidence—he used to send us a calendar annually. My dad, however, soon grew impatient, telling the calendar man he would think about it and to call him in a week. Jean-Pierre then uttered a frightening comment, “What if, meanwhile, something should happen to you?”
This ominous comment shook me. My father laughed it off, but after he explained it to me, I grew even more spooked. I almost expected the shoe to drop. We both went to the barber the next day, and I clenched my hands when I saw the barber sharpen his razor. To my delight, the barber only gave my father’s sideburns a good trim. Phew! I was relieved.
My next contact with insurance was in my late teens when applying for a summer clerical job at a large insurance company. The interviewer was an elderly, seasoned insurance gentleman, somewhat resembling Sir Winston Churchill. He told me he saw beauty in insurance, noting, “An airplane can’t get off the ground without insurance.” He followed up this comment with an uncontrollable belly laugh.
I, for some reason, was readily able to contain my laughter. I didn’t get the job. I guess that interview was not my finest hour.
That event refreshed my discomfort with insurance companies.
What I have always found impressive was the opulence of these leviathans. Most large downtown areas have a preponderance of office towers named after these insurance giants. I recall visiting Boston in my late teens, and I was lured by the expectation of a great view from the top-floor visitor center of the Old John Hancock Building.
In addition to a fine view, guests were rewarded with a cute souvenir, a John Hancock quill feather. I felt a bit better about insurance companies: The panoramic view was enjoyable, and the feather partially made up for Jean-Pierre terrifying me and for Sir Winston Churchill not hiring me—but not completely.
Over my four decades of litigation practice, many of my cases involved motor vehicle accidents, otherwise known as fencing with insurance companies. Out of curiosity, I Googled to find out when the first two-car accident happened. What came up was that in 1895, there were only two cars in Cleveland and they collided. No clue how that happened. Maybe it would have helped had there been a radio traffic report. Each driver could have tuned in and taken evasive measures:
Owner Smith: I hear Williams is on Lakeshore Avenue. I’d best wait until he leaves.
Owner Williams: I hope Smith heard that and doesn’t come near me with his jalopy.
I don’t know how the insurance claims folks worked that one out. Presumably, the desks of the respective adjusters were not too cluttered with files.
Some Googling, incidentally, suggests that the Cleveland car collision incident cannot be fully verified. I wondered whether, by chance, John Hancock Insurance was involved, but I didn’t get anywhere further when searching “auto collision, 1895-Cleveland-feather.”
My practice also included property damage and loss claims. I am talking fire and theft (not bottomry).
Insurers frequently denied fire claims, suggesting the insured torched his own place. They would often take this position after an intensive credit investigation, concluding that the insured needed money. Insurers don’t need my advice, but given that I am retired, I’ll offer it: To securely underpin this argument as to the insured person’s motive for arson, why don’t they just specify it as an exclusion?
… 23g) We do not insure loss or damage caused by fire where the insured directly or indirectly needs, wants or enjoys money.”
This provision should about cover all potential claims.
Technological advances have certainly taken insurance claims investigations into a new dimension. I had a client who claimed his BMW was stolen from his driveway. He told the adjuster he had not operated the car for about a week. The adjuster asked for his remote key, which the insurance company tested and later concluded that the BMW had actually been driven on the day of the alleged theft.
I was aghast at what that key told them about the times and distances of operation of the car. I almost expected it to reveal, “Then at 3:30 p.m., he drove to Baskin-Robbins, where he bought himself a double scoop of French vanilla.”
What often amazes me is that insurers can readily pay out tens of thousands of dollars, no problem, but recoil on nickel-and-dime items. Once, while on a cruise, I developed a medical issue and the good ship’s doctor told me to check it out further at a hospital when we docked in China. My travel insurer reimbursed the transportation to the hospital and medical costs but balked at paying the $75 bill for the translator the ship arranged to accompany me. The adjuster insisted my policy did not encompass translators.
On the one hand, his position annoyed me; on the other hand, I was flattered that he thought I could maneuver my way from the port, to and through the hospital administration and examination experience because, no doubt, he presumed I was fluent in Mandarin. The only word or sound that may have come in handy with the doctor would have been “Ah.”
Fortunately, we escalated this claim and the good insurer ended up paying it.
And given that we drive cars, live in houses and travel, can a day in our lives pass during which insurance does not have a presence?
As for that life insurance, Jean-Pierre never followed up with my father. I don’t know why. Maybe something happened to him.
Marcel Strigberger, after 40-plus years of practicing civil litigation in the Toronto area, closed his law office and decided to continue to pursue his humor writing and speaking passions. Read more of Strigberger’s work at marcelshumour.com, and follow him at @MarcelsHumour on Twitter.