Episode 3 Rip Off Britain


Episode 3

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Transcript


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We asked you to tell us who's left you feeling ripped off

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and you contacted us in your thousands by post, e-mail,

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even stopping us on the streets.

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And the message couldn't be clearer.

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I think there's a lot of hidden information about your bills

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that should be made a lot more clear.

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I don't feel I get treated how I should be.

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You've told us with money tighter than ever, you need to be sure

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that every pound you spend is worth it.

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How do I get my money back? Cos I just think I'm entitled to it.

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So whether it's a deliberate rip-off, a simple mistake

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or a catch in the small print,

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we'll find out why it is that you're out of pocket

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and what you can do about it.

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Keep asking the questions, keep... Go to the top if you have to.

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We do get results, I mean, that's the interesting thing.

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Your stories. Your money. This is Rip-Off Britain.

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Hello, and welcome to Rip-Off Britain,

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the programme that's always ready to fight your corner,

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even though it might seem that no-one else will.

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And today we're going to be taking on an industry

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that every year, without fail, according to our mailbag,

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is one of your biggest bugbears.

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We're talking about insurance -

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a topic that upsets you more than just about anything else.

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Because whether it's a claim on your home or your holiday,

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it seems there are no end of reasons why your policy won't pay out.

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Now sometimes that's because you've been caught out by the small print

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or indeed, the terms of your cover simply aren't clear enough.

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On other occasions, perhaps the company's just messed up.

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But whatever the explanation,

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when you need help but your claim's turned down,

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the consequences can be absolutely devastating.

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Later in the programme, we'll meet a family who know that only too well.

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On top of everything else they've been through,

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they now face losing their home.

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Without the insurance payout, I can't afford to keep the house

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because I can't afford the mortgage payments.

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And the man who took on his insurers and won

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after they deemed that even though he was bedbound in hospital,

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he was still able to work.

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As one expert said to me -

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medical expert - you'd have to be in a coma or dead to get a payout.

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Now, it's bad enough that insurance companies expect us

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to have read every bit of small print that's in their policies

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but sometimes it's seems they expect you to read between the lines

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and work out what's NOT included.

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For the couple we're about to meet,

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the thing they weren't covered for couldn't have been more basic.

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When Sam Wyatt and his wife Kim planned a second honeymoon,

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they decided to do it in style.

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They plumped for a cruise, starting and finishing in Miami

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and flying to and from there from Heathrow via New York.

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We went on a cruise four years ago for our honeymoon

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and we could only afford a week back then,

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so we decided to go for two weeks this time.

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So October 2011, we saved up,

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we went for two weeks, flew out to Miami

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and sailed around the Caribbean.

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And in case anything went wrong, they'd bought travel insurance.

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Sam had done his research

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and chosen the Super Saver policy from Holiday Extras.

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At £32, it wasn't the cheapest quote they'd seen,

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but at first glance, it seemed to cover most eventualities,

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such as flight cancellation or lost baggage.

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Of course, they hoped they wouldn't need it

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and right until the end, the trip was all that they'd hoped for.

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Ah, the cruise was lovely. It was really nice.

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It was even better than when we went the first time.

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We did lots of nice things, did some water sports, that was really fun.

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Had a great time.

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The couple arrived at Miami Airport

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for the first leg of their flight home.

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But 1,000 miles away in New York,

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a heavy snowstorm was causing chaos.

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It's only the fourth time in 135 years

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that snow has fallen in New York's Central Park in October.

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Sam and Kim's flight was grounded.

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They were stuck in Miami,

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but their luggage was already on its way to the UK.

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It was a bit of a nightmare, really. We had no bags, we had no clothes.

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-We had no nothing.

-We had no money.

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The couple were told by the airline to check into a hotel

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and come back two days later.

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Frustrating as that was, they were confident

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that thanks to their insurance, they didn't have to worry

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about the extra costs for accommodation and living expenses.

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We thought we were covered for everything,

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so even though we might have to pay out

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for extra nights' hotel stays and things like that,

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we thought we'd be able to claim when we got home.

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When they arrived home three days later than scheduled,

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they immediately put in a claim with Holiday Extras

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for the money they'd spent - £280.46.

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I was confident we'd bought the right cover.

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We just filled out the forms and sent them off, and I thought,

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"That's the end of it. We'll get a cheque in the post."

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But a month later, with their tans and their holiday memories fading,

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the couple got a letter from Holiday Extras

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to say they wouldn't be getting any of their money back.

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I couldn't believe it, to be honest with you.

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It just seemed that it was one big rip-off.

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-Horrible end to the holiday wasn't it?

-Well, yeah.

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I just couldn't believe they could wriggle out of paying the claim.

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It seemed their Super Saver policy

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wasn't so super after all

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because it didn't cover something most people would consider

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a vital part of their holiday -

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the entire return journey.

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Apart from cases of medical emergency,

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their policy didn't protect them for that leg of the trip.

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Sam immediately rang Holiday Extras

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and when you hear this recording of the call,

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you'll see why he found their explanation so surprising.

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SAM:

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AGENT:

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Yes, you heard it right.

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It's not just what your policy says that matters -

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it's how you interpret what it doesn't say.

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No-one wanted to take responsibility for what had happened.

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'They wanted to shift it on to me.

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'Oh, it's my fault. It's my fault I bought the wrong cover.'

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I should have read the policy wordings and interpreted every word.

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'It was my fault I didn't have'

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the cover I thought I had.

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With his complaint at a standstill, Sam contacted the airline direct.

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They agreed to give them £178 towards their expenses

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as a goodwill gesture,

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but that still leaves the couple out of pocket by more than £100.

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They're angry that it wasn't their insurance policy that paid out.

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We paid out for travel insurance. They should have paid the claim.

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Even without the extra hurdle of reading between the lines,

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Sam and Kim feel the 14-page policy document they had to wade through

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wasn't easy to understand.

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It's a very lengthy document

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and I think it's unrealistic

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to assume that any ordinary person that purchases a policy like that

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is going to actually sit down and read all of the small print.

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But Holiday Extras don't agree.

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The underwriter for their insurance

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told us the couple's flights were delayed rather than cancelled,

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and that Sam had bought their most basic policy for long-haul travel.

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They say...

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But with such a wide choice of cover available...

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Sam and Kim have learned the hard way

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that your travel insurance may not cover you in the way you expect.

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You just think, well, next time we go on holiday,

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perhaps we won't bother looking into holiday insurance

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if this is what happens.

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Well, for something that seems so simple,

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buying holiday insurance can be fraught with pitfalls.

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Here's travel expert Simon Calder

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with advice on how to avoid being caught out.

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When you're booking a holiday,

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of course it makes sense to book insurance at the same time,

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but beware - some really obvious things

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that you might assume are covered

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may not be.

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What could be better than a fly-drive holiday?

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A very popular way to get around

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and many travel insurance policies cover thefts from cars.

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But be careful - some of them only apply between 8am and 8pm.

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Life begins at 50 these days for so many people,

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but not if you're planning an extended trip.

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Would you believe that

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higher premiums kick in

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as soon as you're a day over 50?

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Finally, a couple of positive clauses

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that will actually benefit you. Columbus says

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if you're heading for Australia, then your policy will cover you

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for walking up the Sydney Harbour Bridge.

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I've tried it. It's very scary.

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And Hole In One Insurance covers you for that unlikely golfing event

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for all the drinks you'll need to buy

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in the clubhouse at the 19th hole.

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Now, around half of all adults in the UK

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have some sort of life insurance policy -

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the idea being, of course, that if the worst actually happens,

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our loved ones will have some financial support and security.

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But how many of us fully understand

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the implications of what we've signed up to

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or how devastating the effects can be, if it turns out

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all those premiums haven't bought the protection that we expected?

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This next story is about a family who were horrified to discover

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a time restriction on a policy they believed lasted a full five years.

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When you hear what happened to them,

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if you've got life insurance,

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you might just want to go and check the wording.

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It was January 2011

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when Kim Holland thought it would be worth her husband seeing a doctor.

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But she had no idea it might be serious.

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Paul didn't really have any symptoms.

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Um, he sort of had a kind of a symptom in January

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where he would be taking calls at work

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and if he had to write things down,

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he'd find that he was almost going dyslexic.

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So he was working from home one day

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and I said, "I've made an appointment for the doctor's for you,

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"just to have a check-up."

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The doctor sent him for a scan

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and that's when he was diagnosed with a brain tumour.

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The news hit the family very hard.

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I just felt like someone stabbed me in the heart.

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'Shock, disbelief,

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'just...unbelievable.'

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I felt I was living in a dream

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just because he'd been so healthy, never ill or anything.

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Yeah, same, just devastated, really.

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I think you never think it's going to happen to you

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and all of a sudden, your world comes crashing down in seconds

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and it's...it's awful.

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By the next month, the doctors had concluded

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that Paul's tumour was inoperable, and terminal.

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They thought he may only have four or five years left.

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And while no-one could have predicted any of this,

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Paul had taken steps to ensure that should the worst happen,

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his family would be protected.

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We've always had life insurance,

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Paul always made sure we were covered, you know,

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from when we were married.

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In 2006, Paul had taken out a five-year life insurance policy

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with Royal Liver.

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So after receiving his diagnosis, he phoned the company to discuss it.

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A lady took the telephone call and said she would get back to him

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and when she got back to him,

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she said that it wasn't valid.

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'We were just shocked, in shock, absolute shock.

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'We just couldn't believe it.'

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Royal Liver told Paul

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that for his policy to pay out for a terminal illness,

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that illness would have had to have been diagnosed

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before the final 12 months of the policy.

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So as Paul's was only spotted later, he wouldn't be covered.

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And though such a condition is common in policies of this type,

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Kim considers it very unfair.

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'Because we hadn't given them a year's notice.

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'Paul hadn't said, "I've got a year now,'

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"I'm giving you a year's notice because I have a terminal illness,"

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which is absolutely stupid

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because how can anybody tell how long they've got to live?

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'What we thought we bought was a five-year policy'

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but in actual fact, it isn't a five-year policy,

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it's only a four-year policy.

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So, you know, why would anybody in their right mind

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take out a policy like that? You just wouldn't do it.

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Unfortunately for the Hollands, the clause is based on

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an industry-wide definition of "terminal illness"

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which is that death occurs within 12 months of diagnosis.

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But it's a clause that's frequently missed or, indeed, misunderstood.

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The only other way that Paul's insurance would pay out

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would be if he died in the policy's few remaining months

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so although this seemed unlikely, he continued paying the premiums.

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And as his health deteriorated,

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his family's future was very much on his mind.

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Paul never stopped talking about it.

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You'd go in every single day to the hospice

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and he was just so worried about us,

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what would we do, who would look after us.

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Despite the initial prognosis,

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very sadly, last December, Paul died.

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He did everything he could for us, all the time.

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I can't even put it into words how good he was. He was brilliant.

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Paul died after his policy had run out

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and as his terminal illness had been diagnosed within its last few months,

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his death didn't meet either of the terms under which

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his life insurance would pay out.

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So as well as dealing with their grief,

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his family have had to face up to leaving their home.

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'Without the insurance payout, I can't afford to keep the house'

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because I can't afford the mortgage payments a month.

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So we just... I've had to put the house on the market.

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We did everything together in this house.

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Paul and I did the garden. It's a family house.

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The children were brought up here. It's very sad.

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I'm so upset about it. It's our family home, we've grown up here.

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All our memories of Dad are here.

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For us to leave, it is quite devastating.

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Insurance company Royal Liver is now part of the Royal London Group.

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Now when we contacted them, they reiterated the terms

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under which Paul's policy would have paid out

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and explained that...

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They said they're...

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..but stress it's...

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And they said if Kim believes the insurance was mis-sold,

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she should raise that with the advisory firm

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responsible for the sale.

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Meanwhile, Kim is preparing to leave the family home.

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Well, it's all nearly completed now. I've got a buyer for it

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and I'm probably due to move out within five to six weeks.

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I wouldn't want anybody to go through

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what I'm having to go through, to lose their house.

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I would tell them to read their policy

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and I would certainly tell them to not take that policy

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if it's got that clause

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where you have to give a year's notice for a terminal illness

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because you just never, ever know what's around the corner.

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Thousands of you write to us with your complaints and gripes

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but we've come to Gateshead

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to meet as many of you as we can face to face.

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MUSIC PLAYS

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Overnight, we've transformed this space into our very own pop-up shop

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and inside, we have a whole team of experts

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ready to answer your consumer questions.

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Now, insurance policies are supposed to give us total peace of mind

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just in case something unexpected happens.

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But as we hear all too often, I'm afraid that's not always the case.

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When Craig Crawford started work as a bus driver,

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he was advised to take out extra insurance

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to protect him if he lost his licence through ill health.

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As far as I was aware, I was covered from the moment I signed the paper.

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Around about eight month later or so, I was admitted to hospital.

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I'd had a seizure while I was driving my car.

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They found I had a rare condition on the brain.

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I returned to work, my licence was revoked.

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When I came to claim on this insurance,

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I received a letter to say

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-I wasn't going to receive any payout.

-Giving what reason?

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That I fell short of the qualifying period.

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How long had you been paying into this scheme?

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It was around about seven, eight month.

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I was two or three weeks short of this qualifying period.

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So, James, you've got the actual document.

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Where does it say that on the document?

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You can see here, buried right in the middle of the small print

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that 39 weeks there, very hard to read at all

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and if you weren't even given that paperwork at the beginning,

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it sounds like you do have a valid claim and, you know,

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if I were you, I'd write them some strongly worded letters

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and say, you know, "If you're not willing to compensate me,"

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you can take that complaint on to the Financial Ombudsman Service.

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A couple of avenues open to you there.

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Still a chance you'll be able to get your hands on this money.

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Just keep trying.

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We've come up with a place where you can share your consumer complaints.

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We call it our gripe box -

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a place to really speak your mind.

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And it seems that the price of car insurance

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is pretty high on the agenda.

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No it is, it's ridiculous to try and get insured on your car.

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We pay, like, over £1,000 per year, each.

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Car insurance, it's like that's just going straight through the roof.

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It's virtually impossible.

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You end up paying triple what the car's actually worth.

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I've paid £2,200 for me first year's insurance

0:19:060:19:09

and that's just a total rip-off.

0:19:090:19:11

New driver Natasha is also in danger

0:19:110:19:13

of being forced off the road by the high price of her premiums.

0:19:130:19:17

I passed my test in November.

0:19:170:19:20

I feel my car insurance is a lot more than what it should be.

0:19:200:19:23

OK, so what are we talking about here?

0:19:230:19:25

-£5,000.

-£5,000 a year?

0:19:250:19:28

-A year.

-Wow.

0:19:280:19:29

-It's a lot when you've got a baby too.

-Of course,

0:19:290:19:31

you could buy a new car for that. You're coming up for renewal now?

0:19:310:19:35

So why don't we put your details into one of the comparison sites

0:19:350:19:38

and see what they come up with here?

0:19:380:19:41

It's coming up with some quotes here at the moment.

0:19:410:19:43

So far, we haven't got any better than £2,500

0:19:430:19:48

which is still an enormous amount of money

0:19:480:19:50

but one thing you might be able to consider

0:19:500:19:52

for bringing your premiums down further next time

0:19:520:19:55

is a number of new companies

0:19:550:19:56

that have popped up over the last couple of years

0:19:560:19:59

that put a black box in the back of your car...

0:19:590:20:03

-Oh, yeah.

-..and then monitor how you drive,

0:20:030:20:06

and so if they see that you're driving responsibly,

0:20:060:20:09

that brings your premiums down even further.

0:20:090:20:11

We'll be having a closer look at how those black boxes work

0:20:120:20:15

a little later in the programme

0:20:150:20:17

although Natasha's not keen on the idea.

0:20:170:20:20

It would probably be my last resort if I had to

0:20:200:20:23

but I probably would do it.

0:20:230:20:24

You know, unfortunately, this is the plight of the young drivers

0:20:240:20:27

these days and your car's not worth much.

0:20:270:20:29

No. You know, I mean, it's crazy, you're paying a premium

0:20:290:20:33

that's almost three times worth what your car's worth.

0:20:330:20:35

Keep your fingers crossed that when you come round for renewal again

0:20:350:20:38

in a year's time, those premiums will come down.

0:20:380:20:41

Later in the programme, the gadget supposed to bring down the cost of your car insurance.

0:20:450:20:49

But does it really work?

0:20:490:20:51

I still believe premiums are far too excessive.

0:20:510:20:55

The other big insurance companies do also need to take on this new technology.

0:20:550:20:59

Next, a spirited man who's really taken on the big boys.

0:21:020:21:06

Chris Hargreaves is battling to change a type of insurance

0:21:060:21:09

that as far as he's concerned, turned out to offer almost

0:21:090:21:12

no protection whatsoever.

0:21:120:21:14

He's worried that what caught HIM out

0:21:140:21:16

could lead to the same nasty shock for tens of thousands of other people relying on similar policies.

0:21:160:21:21

So in a way he started a one-man campaign,

0:21:210:21:25

to make sure that what HE went through can't happen

0:21:250:21:27

to anybody else.

0:21:270:21:29

Chris Hargreaves loves the chauffeur business he's spent

0:21:330:21:37

the last 15 years building up.

0:21:370:21:40

But in 2009, all that was threatened

0:21:400:21:42

when he had to spend three months in hospital with internal bleeding,

0:21:420:21:45

a blood clot on the lung, and suspected cancer.

0:21:450:21:49

To have started the business at 21

0:21:490:21:51

and to have been passionate about building a business and working

0:21:510:21:55

for myself, this was the first time ever I've not been able to work.

0:21:550:22:00

And to see my business being financially damaged as well,

0:22:000:22:05

you know, it was...heartbreaking.

0:22:050:22:08

Amidst all the uncertainty,

0:22:100:22:12

Chris was very grateful for the support of his parents.

0:22:120:22:15

It was very, very difficult, seeing him

0:22:150:22:18

so poorly and still trying to run the business

0:22:180:22:21

and the hours that we work and everything else.

0:22:210:22:25

We did find it very hard at the time.

0:22:250:22:28

And as if all that wasn't enough, Chris's wife was made redundant.

0:22:280:22:33

We had to live on the statutory Jobseeker's Allowance

0:22:330:22:36

which was about £62.50 a week, which left us having to go

0:22:360:22:41

cap in hand to her parents who had to buy our food and our essentials

0:22:410:22:45

because we just couldn't afford it.

0:22:450:22:47

But Chris was relieved he'd taken out Income Protection Insurance,

0:22:470:22:52

so that in a situation where he couldn't work, he'd be covered for any financial losses.

0:22:520:22:57

But when he tried claiming on the policy,

0:22:570:23:00

he was told by his insurer, Scottish Provident,

0:23:000:23:03

that it WASN'T going to pay out.

0:23:030:23:05

As far as they were concerned, despite being bedbound in hospital,

0:23:050:23:09

Chris WAS able to work.

0:23:090:23:12

Now I've been racking my brains for three years

0:23:120:23:16

and I still do not know a job that I could have done from my hospital bed.

0:23:160:23:21

Chris's claim was rejected because his policy didn't simply assess

0:23:210:23:25

whether his ill-health stopped him from doing his own work.

0:23:250:23:28

It tested whether he was capable of doing ANY work.

0:23:280:23:32

So his insurers wrote to say they'd considered whether he could do any basic work tasks such as -

0:23:320:23:38

walking. Could he walk 200 metres on a level surface without

0:23:380:23:41

stopping or severe discomfort?

0:23:410:23:45

Lifting. Was he able to lift a kilogramme from table height

0:23:450:23:48

and carry it five metres?

0:23:480:23:50

Using a pen, a pencil or indeed, keyboard.

0:23:500:23:54

Hearing. Could he understand someone speaking in a normal voice?

0:23:540:23:59

Speech. Could he make himself understood in a quiet room?

0:23:590:24:02

And vision. Was he able to read 16-point print using spectacles

0:24:020:24:07

or other aids?

0:24:070:24:09

Scottish Provident concluded that Chris WAS able to do

0:24:090:24:12

two of these tasks while he was in hospital.

0:24:120:24:15

So he could work.

0:24:150:24:18

The way that they're worded,

0:24:180:24:19

they're so fluffy that I might not be able to read 16-point print

0:24:190:24:24

because I'm 95% blind, but the insurance company comes along

0:24:240:24:29

with a giant magnifying glass and gives it you

0:24:290:24:33

and now I can make out that text,

0:24:330:24:35

or I can blink twice for no and once for yes

0:24:350:24:38

so that means I can communicate!

0:24:380:24:40

Chris wouldn't have been assessed this way

0:24:400:24:43

if he'd had what's called an Own Occupation Policy.

0:24:430:24:47

But because his job as a chauffeur was considered high risk,

0:24:470:24:50

he was only able to get cover described as "any occupation".

0:24:500:24:54

And claims under this sort of policy are subject to these tests.

0:24:540:24:58

But Chris now thinks it's unlikely he'd EVER have met

0:24:580:25:02

the criteria for his cover to pay out.

0:25:020:25:04

As one expert said to me, medical expert, you have to be in a coma

0:25:040:25:07

or dead to get a payout,

0:25:070:25:09

which the likelihood of you being in a coma are very low.

0:25:090:25:14

On the basis that his doctors agreed he was unable to work,

0:25:140:25:18

Chris complained to the Financial Ombudsman Service.

0:25:180:25:21

They initially ruled there wasn't sufficient evidence

0:25:210:25:25

to challenge Scottish Provident's decision NOT to pay out.

0:25:250:25:28

My insurer said, "Just cos I was in hospital for three months

0:25:280:25:31

"doesn't mean I was ill, there's no evidence whatsoever

0:25:310:25:35

"to clarify I was ill."

0:25:350:25:39

Scottish Provident argued that although they appreciated

0:25:390:25:42

Chris was very ill, the information they had been provided with showed

0:25:420:25:46

that the criteria under which they would've paid out hadn't been met.

0:25:460:25:50

But refusing to give up,

0:25:500:25:51

Chris went back with medical evidence to back up his claim.

0:25:510:25:55

And THAT did the trick.

0:25:550:25:57

The ombudsman finally ruled that they should pay out,

0:25:570:26:00

and with no right of appeal, the insurer Scottish Provident

0:26:000:26:04

had no choice but to pay up.

0:26:040:26:06

Chris received a total of £4,800 for his insurance claim,

0:26:060:26:10

plus £100 compensation.

0:26:100:26:13

I just burst out crying.

0:26:130:26:16

All I saw was I'd won and it was such a big weight off my shoulders.

0:26:160:26:21

But that's NOT the end of the story.

0:26:220:26:25

Policies like the one Chris had are common throughout the industry.

0:26:250:26:28

So, believing them to be unfair and stacked against the customer,

0:26:280:26:32

he started a one-man campaign

0:26:320:26:34

to try and change Income Protection Insurance.

0:26:340:26:37

And it very quickly got noticed.

0:26:390:26:41

I just set up a Twitter account

0:26:410:26:44

and had a handful of people following me who then started

0:26:440:26:50

to tell me that there was a serious issue with these policies.

0:26:500:26:54

And as the followers grew and became into the thousands

0:26:540:27:00

it became quite clear that these policies don't work.

0:27:000:27:05

Chris now has attracted over 13,000 followers

0:27:090:27:12

to his Angry Policyholder campaign's Twitter page.

0:27:120:27:16

And James Daley from Which? Magazine thinks that that can only be good news.

0:27:160:27:20

People aren't questioning the small print

0:27:200:27:23

and I think that companies have got away with it for far too long,

0:27:230:27:26

creating policies that are complex and working in ways

0:27:260:27:29

to ensure that they don't have to pay out

0:27:290:27:31

when customers really need it.

0:27:310:27:33

And so, it seems that finally there's a bit of a head of steam

0:27:330:27:35

behind a movement for change here and hopefully,

0:27:350:27:39

we'll see more insurers following the lead of some of the big ones

0:27:390:27:42

who are starting to have better quality policies

0:27:420:27:44

and higher pay-out rates.

0:27:440:27:45

Insurance giant Aviva has already altered its income protection policies to make them "less severe".

0:27:450:27:52

And now the company he took on is changing theirs as well.

0:27:520:27:56

Scottish Provident told us that although its income protection policies

0:27:560:28:00

have been...

0:28:000:28:01

Chris's case showed them there is...

0:28:060:28:08

So alongside other insurers, they're...

0:28:150:28:18

as well as reviewing which occupations are eligible

0:28:210:28:24

for their "own occupation" cover in order to make their products...

0:28:240:28:28

The changes will come into effect next year.

0:28:310:28:35

But it's a great success for Chris

0:28:350:28:37

and he's determined to carry on campaigning.

0:28:370:28:40

I set this campaign up to try and make a difference

0:28:400:28:45

but it's still so upsetting and distressing that I've had to do it.

0:28:450:28:51

I think it's disgusting that anybody can be treated

0:28:510:28:53

like the way that we were treated.

0:28:530:28:55

When you feel you've had a raw deal, it can be hard to know

0:28:590:29:02

what to do or where to turn.

0:29:020:29:04

So to help you, we've put together a new booklet full of

0:29:040:29:07

practical tips and advice.

0:29:070:29:10

You can download the free guide on our website.

0:29:100:29:12

Or to receive a copy in the post, send an A5 stamped

0:29:160:29:19

and self-addressed envelope to the address that we'll give you

0:29:190:29:22

at the end of the programme.

0:29:220:29:24

In our last series,

0:29:240:29:25

we investigated the spiralling cost of car insurance,

0:29:250:29:29

especially after so many of you told us about the eye-wateringly high quotes that you were getting,

0:29:290:29:35

which, in some cases, put the cost of driving totally beyond reach.

0:29:350:29:40

But it seems that there may be a way that you can bring

0:29:400:29:43

those premiums down.

0:29:430:29:45

Drivers of ALL ages have noticed a whopping leap

0:29:470:29:49

in the cost of their car insurance in recent years.

0:29:490:29:53

In fact, the AA says premiums have more than doubled since 2008.

0:29:530:29:57

But there's one group that's been particularly badly hit -

0:29:570:30:01

young drivers,

0:30:010:30:02

who say that high premiums are pricing them off the road.

0:30:020:30:07

In our last series, Peter Nolan and mum Julie told us about

0:30:070:30:12

the eye-watering quotes that they'd had after Peter passed his test.

0:30:120:30:15

Some of them were £17,000,

0:30:150:30:17

which at that point you just think, "Oh, my God! What's going on?!"

0:30:170:30:22

Julie just couldn't afford to insure Peter,

0:30:220:30:25

leaving him still dependent on her for lifts.

0:30:250:30:29

You want to go and drive, but you can't.

0:30:300:30:32

You can go out with your mates, but it is not the same thing.

0:30:320:30:34

It's young men aged between 17 and 22

0:30:340:30:39

who pay the most for car insurance on average.

0:30:390:30:41

Almost three times the typical premium for all age groups.

0:30:410:30:45

The cheapest price I got when I was first looking for quotes

0:30:450:30:49

was around four or five grand.

0:30:490:30:50

The dearest going up to 27, 28 grand which is ridiculous.

0:30:500:30:55

But there IS a way that you can bring those prices down...

0:30:550:30:57

provided that is, that you're a good driver.

0:30:570:31:01

And it's by fitting one of these little black boxes to your car.

0:31:010:31:04

Insurance companies can monitor how well you drive

0:31:040:31:07

in order to more accurately calculate your risk

0:31:070:31:10

and your premiums.

0:31:100:31:12

It's called telematics technology.

0:31:140:31:16

And it's being used by an increasing number of insurance companies.

0:31:160:31:20

It means if you're in a high-risk group,

0:31:200:31:23

but you drive in a low-risk way,

0:31:230:31:25

your insurance could come right down.

0:31:250:31:27

Of course, if you drive in a way that makes you a higher than average risk, it could go up even more!

0:31:270:31:32

Julie considered having a box like this fitted last year,

0:31:350:31:39

but at the time, the premiums were still too high.

0:31:390:31:43

Then she heard that quotes for drivers with telematics

0:31:430:31:47

had tumbled, so she decided to give it a go.

0:31:470:31:49

Julie went with Co-operative Insurance,

0:31:510:31:53

who fitted the box earlier this year.

0:31:530:31:55

And Amy Kilmartin from the company can explain how it works.

0:31:550:31:59

This is the Smartbox,

0:31:590:32:01

and dependent upon the car, it's wired into the vehicle.

0:32:010:32:04

It's not visible to the customer.

0:32:040:32:07

It looks at things such as speeding, cornering, acceleration,

0:32:070:32:10

the time of day that the car is driven

0:32:100:32:13

and all that data is fed back to our servers

0:32:130:32:15

to give us a reading on how Julie and Peter drive their vehicle.

0:32:150:32:19

It's had one instant and long-awaited result.

0:32:210:32:24

As you can see, Peter is getting in that car without mum Julie.

0:32:240:32:28

Because as soon as she had the box put in,

0:32:300:32:32

the quote for an annual policy that also covered Peter

0:32:320:32:36

came out at a more affordable £1,400.

0:32:360:32:40

Still not cheap by any means,

0:32:400:32:42

but a massive improvement on the thousands she'd been quoted before.

0:32:420:32:46

And Peter's over the moon to be behind the wheel at last.

0:32:460:32:49

It's nice to be on the road.

0:32:490:32:51

I like driving around being independent, really.

0:32:510:32:54

And there are benefits for Julie as well.

0:32:540:32:57

Her driving is also monitored.

0:32:570:32:59

When I first got it installed, I did think

0:32:590:33:01

"Oh, I'm going to be conscious of this box in the car,"

0:33:010:33:04

but I've adjusted to it really well.

0:33:040:33:07

Obviously they monitor you,

0:33:070:33:08

so if there's any issues, they'll alert you,

0:33:080:33:11

and if you are driving well,

0:33:110:33:13

every 90 days they'll readjust your monthly payments.

0:33:130:33:16

On the computer, my mum can log into the insurance company's website

0:33:160:33:21

and you can, from there, check how well you're doing.

0:33:210:33:24

They give you a score from 1 to 5.

0:33:240:33:27

This is your dashboard,

0:33:270:33:28

and it's broken down into speed, acceleration,

0:33:280:33:31

braking, cornering too fast and driving at dangerous times.

0:33:310:33:36

I've been doing very good on that recently,

0:33:360:33:38

apart from accelerating and braking, which I need to work on.

0:33:380:33:41

Julie is thrilled she can finally get the cover her son needs

0:33:430:33:47

to drive by himself.

0:33:470:33:49

And the icing on the cake? Her premiums have gone down as well.

0:33:490:33:53

The safer you drive, your policy is reduced.

0:33:530:33:56

If you don't drive safe, your policy's increased.

0:33:560:33:58

I've just had a letter of congratulations

0:33:580:34:00

saying I've been driving well

0:34:000:34:02

and I've now got an £80 reduction in the cost.

0:34:020:34:06

Insurance companies believe that

0:34:080:34:10

the technology not only reduces premiums, but also accidents.

0:34:100:34:14

At Insure The Box, we have around about 75,000 customers

0:34:150:34:18

with these devices in the car.

0:34:180:34:20

Having the box in the car means that you're much less likely

0:34:200:34:24

to have an accident and it cuts that accident rate by about half.

0:34:240:34:28

The telematics box also allows you

0:34:280:34:31

to assess actual driving performance when it comes to renewal.

0:34:310:34:35

So we don't have to take into account

0:34:350:34:38

the traditional factors of the type of car,

0:34:380:34:42

your gender, your age, etc.

0:34:420:34:45

We can base the renewal price on actual driving behaviour.

0:34:450:34:48

So if you have driven well, we reflect that in our renewal price.

0:34:480:34:53

Back in the 1980s,

0:34:540:34:57

the idea that cars could have smart technology like this

0:34:570:34:59

was the stuff of TV sci-fi.

0:34:590:35:02

But now it's a reality,

0:35:030:35:05

and one that could save you money.

0:35:050:35:08

Constant monitoring won't suit everyone,

0:35:090:35:12

especially as some policies may question

0:35:120:35:15

whether you're driving too often at times when

0:35:150:35:17

the risk of accidents is statistically higher,

0:35:170:35:20

such as night-time.

0:35:200:35:21

But Julie, still angry about what Peter would have to pay

0:35:210:35:24

for insurance without telematics,

0:35:240:35:28

is pleased that technology is becoming more common.

0:35:280:35:30

I still believe premiums are far too excessive.

0:35:300:35:33

Lots of kids who've just passed are never going to get to drive.

0:35:330:35:36

The other big insurance companies

0:35:360:35:38

do also need to take on this new technology.

0:35:380:35:41

The Smartbox is making me a safer driver.

0:35:410:35:43

I'm always on me toes and alert

0:35:430:35:44

to what's going on around me when I'm on the road.

0:35:440:35:46

We get a lot of letters and emails

0:35:510:35:53

about the stories we're going to be hearing about today.

0:35:530:35:56

Insurance is one of the subjects that you write to us about

0:35:560:35:59

more than just about anything else and really, that's not surprising.

0:35:590:36:03

The UK insurance industry is the third largest in the world,

0:36:030:36:08

with some 290,000 employees

0:36:080:36:11

providing cover of one sort or another

0:36:110:36:13

for just about every adult in the country.

0:36:130:36:16

But what do we really know about the policies that we're getting?

0:36:160:36:20

You've got to read the small print.

0:36:200:36:23

There's too many clauses for you to understand,

0:36:230:36:26

for the normal layman to understand, anyway.

0:36:260:36:29

None of my friends read their insurance policies,

0:36:290:36:31

but I'm sure there are people that do. There must be.

0:36:310:36:33

I mean, they're there for a reason.

0:36:330:36:34

The majority of insurance claims are successful.

0:36:360:36:38

But of course, it's the ones that are rejected

0:36:380:36:41

that we usually hear about.

0:36:410:36:43

And when we do, though it can seem as if

0:36:430:36:46

insurance companies are just trying to wriggle out of paying,

0:36:460:36:49

all too often it turns out

0:36:490:36:52

that you've bought a policy that was not right for you

0:36:520:36:55

and that never gave you the cover that you thought it would.

0:36:550:36:58

It's not only claims you write to us about.

0:36:580:37:01

Insurance premiums are a bone of contention with you as well,

0:37:010:37:04

and not just because you think that too often they're too expensive.

0:37:040:37:08

It's also because it's not always clear

0:37:080:37:11

exactly how those premiums are worked out.

0:37:110:37:14

They'll typically be worked out according to your postcode,

0:37:140:37:18

but it could be that the insurance company will assess your risk

0:37:180:37:21

based on your age, your job, and whether or not you're married

0:37:210:37:24

to the person with whom you're living.

0:37:240:37:26

But by the end of this year, thanks to a ruling by the European Court,

0:37:260:37:29

it'll be illegal for them to set rates based on gender.

0:37:290:37:33

So whereas previously,

0:37:330:37:34

favourable rates of car insurance may have been available

0:37:340:37:38

exclusively for women drivers,

0:37:380:37:40

from now on, that won't be the case.

0:37:400:37:43

But could we all end up paying

0:37:460:37:48

higher premiums in the coming months?

0:37:480:37:51

After this year's heavy rain,

0:37:510:37:52

British insurers face the worst bills for flood damage since 2007,

0:37:520:37:57

so it's quite possible that their increased costs

0:37:570:38:00

will get passed on to customers.

0:38:000:38:02

With insurance premiums and problems

0:38:070:38:09

pretty high on your list of concerns,

0:38:090:38:11

I've come here, to the headquarters

0:38:110:38:13

of the Association of British Insurers

0:38:130:38:15

to talk to their top man and find out why it is

0:38:150:38:17

that so many people think that insurers are more interested

0:38:170:38:21

in looking after themselves than their customers.

0:38:210:38:25

Sad to say this, but it is pretty clear

0:38:260:38:29

that most people that write to us,

0:38:290:38:31

and indeed, I think quite a large proportion of the population,

0:38:310:38:34

still feel insurers are people who are much more interested

0:38:340:38:36

in protecting themselves than looking after their customers.

0:38:360:38:39

How do you answer that criticism?

0:38:390:38:42

Insurers want to look after their customers,

0:38:420:38:44

and they want to give them cover

0:38:440:38:47

which suits their needs and which pays out when they need it.

0:38:470:38:50

And when things go wrong,

0:38:500:38:51

we want to make sure that they're put correct quickly.

0:38:510:38:54

You say that, but we have caseloads of people

0:38:540:38:57

who say that they have fought tooth and nail

0:38:570:39:00

to try and get compensation from insurers,

0:39:000:39:03

and insurers just are very good

0:39:030:39:05

at wriggling out of ever paying anything back.

0:39:050:39:08

Well, insurers pay out £10 million a day on domestic property claims,

0:39:080:39:11

£22 million a day on motor claims,

0:39:110:39:12

and that's not wriggling out of their obligations.

0:39:120:39:16

The key is to be careful when you buy the insurance.

0:39:160:39:19

Think carefully about what your needs are,

0:39:190:39:21

what your cover needs are,

0:39:210:39:22

and read the policy documents when they arrive.

0:39:220:39:25

I know it's boring, but read them when they arrive.

0:39:250:39:28

But even if you read them, sometimes the terms and conditions

0:39:280:39:30

are so complex and complicated,

0:39:300:39:32

that people actually still don't necessarily understand

0:39:320:39:34

what they're signing up to.

0:39:340:39:36

Shouldn't the onus be on you

0:39:360:39:38

to make those contracts a lot less complicated?

0:39:380:39:41

Well, insurers try to write them in plain English

0:39:410:39:43

and they need to produce a Key Facts document

0:39:430:39:46

which makes clear what the main issues round cover are,

0:39:460:39:48

and that should make things clear to the consumer.

0:39:480:39:51

So can you honestly say you think that insurance companies

0:39:510:39:54

go far enough to ensure

0:39:540:39:55

that when they sell a policy to a member of the public,

0:39:550:39:59

that that consumer is getting the best deal possible?

0:39:590:40:02

Our members want to sell products which suit the people

0:40:020:40:05

to whom they're selling them,

0:40:050:40:06

which deliver when they need to and deliver on time,

0:40:060:40:10

and it's in no-one's interest for that to go wrong.

0:40:100:40:12

They don't want to have lots of complaints

0:40:120:40:14

coming to programmes like yours,

0:40:140:40:16

they don't want lots of complaints going to the ombudsman,

0:40:160:40:18

and they'll work hard to make sure that doesn't happen.

0:40:180:40:21

One final question about the amount that you charge as premiums,

0:40:210:40:24

because people find that their insurance on the whole

0:40:240:40:27

tends to go up year after year.

0:40:270:40:30

Well, premiums don't necessarily go up year on year.

0:40:300:40:32

People tend to notice when they do go up,

0:40:320:40:34

and they notice less when they go down.

0:40:340:40:36

Insurers have to have reserves for big events.

0:40:360:40:39

But equally, if you have a year in which

0:40:390:40:41

a very large number of events happen,

0:40:410:40:43

then premiums have got to come in to cover that.

0:40:430:40:46

And the last couple of years, they've paid out a huge amount

0:40:460:40:48

in burst pipe claims, which is less noticeable for people,

0:40:480:40:52

and we haven't seen a massive increase in premiums as a result.

0:40:520:40:55

Confused over your bills?

0:40:570:40:59

Trying to wade through never-ending small print?

0:40:590:41:02

You can write to us:

0:41:020:41:03

Or send us an email:

0:41:130:41:14

The Rip-Off team is ready and waiting

0:41:180:41:20

to investigate your stories.

0:41:200:41:22

As we've seen, you only have to miss a few words

0:41:240:41:27

in an insurance policy for you to discover

0:41:270:41:30

that you're simply not protected in the way you thought.

0:41:300:41:32

And because of that, there're many, many people

0:41:320:41:35

paying premiums on policies that won't pay out

0:41:350:41:38

should they need to make a claim.

0:41:380:41:39

Well, we know it's really boring,

0:41:390:41:41

ploughing through all that small print, but unless you do it -

0:41:410:41:44

or you're prepared to take advice from someone who will do it for you -

0:41:440:41:47

sooner or later you could end up with a nasty surprise.

0:41:470:41:50

And if you're like the people we've been hearing from,

0:41:500:41:52

that could happen at the worst possible moment.

0:41:520:41:54

And unfortunately it obviously happens quite a lot,

0:41:540:41:57

because the number of letters that we get on this topic suggests

0:41:570:42:00

that there really is a lot more insurance companies themselves

0:42:000:42:03

could do to make their policies a lot easier to understand.

0:42:030:42:06

So don't let up, and make sure that we know

0:42:060:42:09

if you think you've been treated unfairly.

0:42:090:42:12

So meanwhile, let's just say that we will see you the next time,

0:42:120:42:15

when we'll be looking at even more things

0:42:150:42:17

that have left you feeling ripped-off.

0:42:170:42:20

-But until then, from all of us, bye-bye.

-Bye-bye.

-Bye.

0:42:200:42:22

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