Has your locum insurance provider changed the cover of your policy? There is a good reason. Let's explain.
Underwriters withdrawing from some providers
We have heard, yet again, that an underwriter has withdrawn its backing from a locum insurance provider.
As a customer of one of those providers, you won’t know about it until your policy’s renewal date. That’s when you’ll get the unwelcome news that the policy you bought last year is being changed and, funnily enough, it’s sure to be to your detriment.
This has never happened to Practice Cover’s clients – and we think that’s worthy of an explanation.
The right way to provide cover is with proper underwriting from day one
Here at Practice Cover our underwriters consider each client individually. This means you answer some basic questions about your health and wellbeing before we can offer you appropriate cover, at an appropriate price.
That’s not to say that, if you have an existing health condition, you will be turned down or have onerous terms applied. For example, if you’re a diabetic, you will probably receive ‘standard terms’ i.e. no specific exclusions or restrictions at all.
The point of asking you about your health is so that our underwriters have a clear picture of the health of the people for whom they are providing health insurance. It’s obvious that, if they insure people ‘blind’ something will come unstuck somewhere along the line.
So why do some companies undertake no medical underwriting at the start?
Well, it makes it slightly easier for you to sign up to them. They can position the ‘underwritten’ approach as unnecessarily bureaucratic or intrusive and let you continue under the misapprehension that, if you don’t need to provide any evidence of health this is because your existing health conditions will always be covered.
And why is that a problem?
Ultimately, it’s their underwriter that picks up the bill from claims that were risk-laden at the outset. If the losses on claims are unsustainable the underwriter’s defence is either to:
- withdraw from that provider, leaving the provider to source cover for its customers elsewhere, or
- try to contain future losses by restricting customers’ cover in future, or
- increase premiums.
If the underwriter pulls out it’s the customer – you – that loses out.
So, what are your risks if this happens?
The problems for you when cover has to be re-underwritten
When a new underwriter comes in or customers’ future cover is restricted, it’s possible that you overlook the implications in the rush to renew your policy. It often seems to be the case that renewal is invited at the 11th hour, giving clients very little time to delve into the changes that have been applied to their cover and to source an alternative. You might even be forgiven for assuming that, as you’re staying with the same provider, your cover will stay the same – and I can assure you that almost certainly won’t be the case.
A new underwriter or an existing underwriter trying to contain losses will restrict your cover and you need to assess the cover you’re being presented with just as carefully as you would if you were buying from them for the first time.
One of the main problems is around ‘continuity of cover’.
You may be told that the continuation of cover promised by your provider isn’t going to be delivered. That means your history of illness may be subject to restrictions or exclusions. As we keep seeing with some providers, this can happen time and again, rendering your continuation of cover worthless.
What should you do?
If you fear your provider has switched underwriter – or is likely to – then it may be time to look for an alternative. We strongly recommend you seek a provider like Practice Cover that offers medical underwriting and continuity of cover that has never failed. This means your cover will not be affected by other clients who are high risk, and you gain peace of mind into the future.
Can I expect to pay more for cover?
Our competitors are making price increases, and in a sector where insurers are paying out £9.9m every day* on protection policies this may not sound surprising.
But our underwriters have no plans to follow suit. Just look at the facts on how we’re adding value at every stage:
• At Practice Cover even clients who have made a claim have not been charged a higher premium. That’s not how we work.
• We have a ‘continuity of cover’ option with our locum insurance so that, if you become ill – let’s say you have a heart attack – the underwriters won’t exclude heart attacks from your future cover.
• We include a no claims discount so premiums can actually reduce by staying with us.
• We can confirm that premium rates will stay the same in the foreseeable future – as they have for more than 9 years.
These facts explain why we’re one of the most stable and cost-effective providers of locum insurance and overheads insurance on the market.
If you’d like to know more about our policies, then speak to Lynda Cox on 0800 028 5633.
* Insurers’ pay outs for protection policies, including income protection, critical illness and life insurance. Source ABI 2017.
** AA British Insurance Premium Index Q2 2017
The opinions presented in this blog are solely those of the author on behalf of Practice Cover Limited and they do not constitute individual advice. Practice Cover is a trading name of Practice Cover Limited and is authorised and regulated by the Financial Conduct Authority