Three years ago I reached a settlement with an insurance company after negligence by one of its clients. The award included £7,000 for the probable acceleration by five years of osteoarthritis in the neck. A year ago, cancer was diagnosed. The probability now is that death will predate any acceleration. Should I repay the £7,000?
Will you excuse me for a moment while I phone The Guinness Book Of Records to register the first known instance of someone feeling sorry for an insurance company?
Insurers calculate premiums in such a way as to ensure that they can lose money only if their actuaries are all spending their lunchbreaks smoking crack. And just in case an actuary should err in his sums, insurers invented the excess: this is basically the insurance world’s version of Tony Soprano warning you to mind your own business, if you know what’s good for you. An excess is designed to make you think twice about filing a claim. The higher the excess you agree to on your policy, the lower the premium, a tantalising give-and-take formula that results in your being able to insure a new Bentley for just £1.79 a year, providing you’re willing to foot the first £270,000 of any claim.
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Reimbursing the insurer might seem noble. But repaying the £7,000 is neither morally merited nor wise. The insurance company does not feel cheated because, as I have outlined, it is mathematically difficult to outmanoeuvre an insurer. And with the advances in cancer treatment, there is every reason to hope that you will live long enough to deserve the payout. If you feel you cannot enjoy the cash, why not donate it to a worthier cause than an insurance company?
FACING A DILEMMA
Have you got a dilemma of your own?
Write to Modern Morals, Times features, 1 Pennington Street, London, E98 1TT. E-mail: modernmorals@thetimes.co.uk