This letter is written in response to the question posed by the unfortunate headline ‘Is insurance just a scam?’ (Sunday Mail, May 30). The headline is over an article by Antonis Loizou FRICS, which contains in its first paragraph a reference to ‘various tricks’ that insurance companies come up with. As the director of an international loss adjusting office, practising for the exact number of years that Mr Loizou has been involved in real estate, my answer to your question ‘Is insurance just a scam?’ is a resounding and unequivocal No!
I have the greatest respect for Mr Loizou in his real estate practice and would be happy to accept anything that he said on that subject. However, I would agree with the sentiment in his first paragraph, that he is still learning, so far as insurance is concerned and not for the reasons that he gives in his article.
Insurance policies cover specified events, such as fire, storm and tempest etc. Rain on its own is not a specified event, as it is a common occurrence, which properties are expected to withstand. The examples that Mr Loizou provides are short on detail of the circumstances of the events described and completely fail to indicate the insured event, that has occurred in each case which would trigger a valid insurance claim.
Mr Loizou’s principal allegation is that insurance policies do not pay on a new for old basis and that deductions are made for depreciation. He refers to four insurance companies, only one of which issues policies on a replacement value basis. This is not our experience. We deal with insurance claims for a considerable number of companies in the Cyprus insurance market and all of them issue reinstatement policies paying the insured replacement values, without depreciation. Only in rare cases, due to special circumstances, do those insurance companies issue ‘old fashioned’ indemnity policies, which involve the deduction of depreciation. We are therefore not surprised that Mr Loizou’s letter to the Registrar of Insurance did not receive a response.
Anyone, with the slightest knowledge of insurance, reading Mr Loizou’s allegations, would dismiss them as unfounded and not representing the current practice of the insurance market. Our office is part of a totally independent global organisation, with 600 offices serving the insurance industry and public worldwide.
We are regarded as experts on the subject of insurance, and I have been accorded that status in court cases and arbitrations in Cyprus, relating to insurance claims. My expert finding is therefore that the insurance industry is ‘not guilty as charged’.
I have only the highest regard towards Mr Loizou, whose 42 years of expertise in the real estate business I wholly accept. I trust that he and your newspaper will accept my similar expertise on the subject of insurance.
Patrick Elston M.I.I.L.A Member of the International Institute of Loss Adjusters, director of Cunningham Lindsey International Loss Adjusters, Nicosia