What is "claims loading"?

sonya7

Hi folks, we're just wondering, what exactly is "claims loading"? To briefly outline, we have insurance for a pet. We've had it for about 3 years now and about a year or so after getting it we needed to avail of it a few times (3 or 4 times) when our dog had some problems. She needed several op's that altogether, excess included, and meds, probably totaled a combined say €4,000. The excess is €100 and the monthly premium for the last 3 years was very, very reasonable. Then a few days ago we get a letter telling us our premium has increased, it has almost quadrupled. Not by 50%, or doubled, or tripled, almost quadrupled?

Well actually I'm incorrect, the premium itself is similar give or take a few euro. It's that they've lumped on "claims loading" which is amounts to two times what the premium itself is. So for example, the premium is for arguments sake, €100 a year. The "claims loading" is €200 on top of that €100 bringing it to €300.

Thing is we're heading towards 2015 and our dogs op's were all completed by Spring 2013 (started Autumn 2012) When we renewed last December (Dec 2013) there was no claims loading. We might have to drop the insurance, we'll need to think long and hard on it. Many, many people don't have pet insurance but it can be very useful as it was for us already - and of course our dog - as without it, well, we don't think we could have afforded the cost. Luckily her condition wasn't life threatening but she may have been left in on and off discomfort and pain.

So, is claims loading normal in the insurance industry? And is a claims loading of two times what the premium is very high? We were gobsmacked. Thanks for your help.

sonya7

Apologies, I should not have said that the premium has quadrupled, it hasn't. The premium is still very reasonable. It is that the claims loading has now tripled what the premium itself is. Thanks.

To Elland Back

You were paying €100 and have claimed around €4,000. The claims loading is to distinguish between you and other policyholders who haven't claimed. Basic principle with all insurance policies

coylemj

To Elland Back wrote: »

You were paying €100 and have claimed around €4,000. The claims loading is to distinguish between you and other policyholders who haven't claimed. Basic principle with all insurance policies

+1 No claims bonus in reverse.

If you claim off your motor or house policy the same thing will happen, next renewal is through the roof and every other insurance company will refuse to quote you if you've had a recent claim thereby leaving you at the mercy of your current insurer.

You claimed €4,000 for several conditions, none of which was life-threatening. Maybe the insurance company is trying to tell you something.

rainbowtrout

sonya7 wrote: »

So, is claims loading normal in the insurance industry? And is a claims loading of two times what the premium is very high? We were gobsmacked. Thanks for your help.

Yes, if you make a claim on your car insurance or a claim is made against you on your car insurance, your next premium will go up. Same with house. All insurance works the same.

To the insurance company you are now a high risk client. You have possibly paid no more than €30 a month to them but claimed €4000 from them. They are currently operating at a loss in terms of their dealings with you.

If you don't want to pay the premium for your pet, then put away money into an account every month that is the equivalent of the premium so that if you need to get your dog treatment you have some sort of a back up fund. You also need to consider how much you are willing to spend on your pet.

sonya7

coylemj wrote: »

+1 No claims bonus in reverse.

If you claim off your motor or house policy the same thing will happen, next renewal is through the roof and every other insurance company will refuse to quote you if you've had a recent claim thereby leaving you at the mercy of your current insurer.

You claimed €4,000 for several conditions, none of which was life-threatening. Maybe the insurance company is trying to tell you something.

A condition doesn't have to be life threatening to claim - just as with health insurance for people. For example if your dog broke their leg, just an example, while in itself not life threatening it would still require surgery. The same goes for a myriad of other conditions, just as with people.

sonya7

rainbowtrout wrote: »

Yes, if you make a claim on your car insurance or a claim is made against you on your car insurance, your next premium will go up. Same with house. All insurance works the same.

To the insurance company you are now a high risk client. You have possibly paid no more than €30 a month to them but claimed €4000 from them. They are currently operating at a loss in terms of their dealings with you.

If you don't want to pay the premium for your pet, then put away money into an account every month that is the equivalent of the premium so that if you need to get your dog treatment you have some sort of a back up fund. You also need to consider how much you are willing to spend on your pet.

I guess for the insurance company those who don't claim are hopefully sufficient enough to cover the costs - and their overall profit margin - for those who do claim.

We have savings so wouldn't have to have insurance for our dog though if she did fall ill or developed one condition or another having insurance would be handy. Depending of course on the premium paid. But more likely than not it still, for now, makes sense to have it. Better to have it and not need it than to need it and not have it. At worst we've lost a few hundred a year, at best, should she have any issue we've potentially saved thousands. Thanks.

sonya7

To Elland Back wrote: »

You were paying €100 and have claimed around €4,000. The claims loading is to distinguish between you and other policyholders who haven't claimed. Basic principle with all insurance policies

We don't have any other insurance such as home, health or motor so were unsure of the system. Though we are thinking of taking out life assurance. Thanks.