Insurance – what a scam!

You might not have thought of it this way, but insurance is a bet. I bet the insurance company £100 that our house won’t fall down and they give me odds of a 1000 to 1. House burns down and they pay up. Obviously it’s a bit more complex than that, the small print. It’s only fair that I don’t deliberately burn the house down, for example.

But this small print is where the insurance companies vary from the honest betting shop.

Imagine the scene, your horse romped home at 10 to 1 two lengths ahead of the field so you head into Ladbrokes with your ticket to claim your prize. “Ah, sorry but we aren’t going to pay up because the sun was in the horse’s eyes as defined in clause 73, subsection 19 b of the betting terms” How long do you think they would be attracting punters.

But this is precisely what insurance companies do all the time. They look for something in the small print to get out of paying. Some friends of ours had there house burnt down. It was arson, but not by them. Their cat and dog died in the fire and it was only luck that their daughter wasn’t there. Still, the insurance company held off pending the police reports, which you can understand.

OK, my friends ‘won the bet’ so pay up. Well no, first they want a quote for rebuilding and a full list of contents. Understandable but then they proceed to argue every line. It took them nearly six years to settle in full. Six years of letters back and forth, lawyer’s opinions, letters and threats and just blackmail. If you accept a lower figure than you’ve lost we’ll pay up being the subtext.

Of course, we need insurance. The risk of the house burning down is a bet we have to take and when we drive on the road it’s the law, but some insurance just isn’t worth taking. In our post today we’re exhorted to insure against plumbing problems. Apparently, for just £24 a year (against the usual price of £75 a year if we say yes today) we can be covered for the huge bill of fixing our mains pipe if it bursts or repairing a nail through a heating pipe.

So, our bet is £75 to cover an average bill of say £250 if and it’s a big if, something happens. We’ve not had any plumbing done since we moved apart from a new tap so we have saved £325 towards our plumbing fund. Not a good bet to take then.

If you borrow money they try and sell you insurance to cover the loan payments if you are ill or un-employed, often for a limited period as well. The cost is often higher than the loan itself! So not the best of bets there either. And they are notorious for not paying out on those schemes, especially if you have had an illness before. The small print is enough to drive a lawyer to distraction.

So, before you insure ask the following questions:

Do I need it? What is the risk and what would be the cost? Is it a good bet? And if I do ‘win’ will the bees pay up or just look to get out of their obligations.

That’s it – rant over!


Posted in Rants and Raves
14 comments on “Insurance – what a scam!
  1. John says:

    Excellent site that, yes I’ve seen it 🙂

  2. Will says:

    John – you get what you pay for – go with the cheapest quote and you’ll have problems come claim time. Pay a bit more and go with a reputable company and you’ll be fine. Obviously an insurance company will await Police/ Fire Service reports; check rebuilding costs etc but 6 yrs does seem wildly excessive – shd have got a Solicitor to ‘hurry’ them up. I do agree with you re: the sorts of insurance that is offered when you take out a loan or for when you boiler breaks down etc – that is a rip off! And never go thru a broker if you can avoid it – 80% of yr premium will go to the broker and only 20% to the Ins Co – almost always better off to go direct to the insurance co themselves. As you say insurance is abt balancing the risks so if you’ve taken every precaution you shd think to yrself “Wld I be better off just putting this money in the bank each year and ‘underwriting ‘ the risk myself?” If you have a loss then you use the money you wld have paid in insurance prems to replace your loss – I wldnt apply this to building insurance though – contents maybe!

    Love the site – keep up the good work.

  3. Ken Chapman says:

    I sometimes visit this site to see what is happening in the world of allotments but I really fail to see what insurance has to do with gardening – I am really not interested in your rants and raves about whatever has given you indigestion today! I think I would rather get some more informed comments from a more specialist site if I wanted to. Perhaps people who have dedicated sites maybe run out of ideas, want to try and extend their site into current affairs or whatever – just stick to what you think you know and I for one will visit more often.

  4. John says:

    Totally agree with you Will, insuring risks you can underwrite yourself is rarely sensible.
    Ken, this is my site. I pay for it and I’ll put what I like on it. If you don’t want to read something then don’t – there’s always a digest to say what any post is about.
    Relevant to allotments? When a parish council (West Monkton)is trying to get the plotholders to buy public liability insurance at £80 pa it’s relevant. When you try and insure the contents of your shed it’s relevant and when we have to pay £40 a year for PLI for our NVS meetings held in a pub or a member’s house it’s relevant.

  5. Ken Chapman says:

    Point taken! I just thought you might like some feedback – didn’t realise I had touched a raw nerve.

  6. Just reading your comments about Allotment Insurance. Unfortunately nowdays the world has gone mad, but more and more councils are recommending that people have their own allotment insurance on their plot. Councils insurance almost always only covers pathways, boundries and fences. The SWCAA (Southwest Counties Allotment Association) is a new not for profit organisation set up to promote and protect our precious allotment sites. As part of our service we offer INDIVIDUALS Pulic and Product Liability Insurance cover for up to 5 million pounds for just £2 per person per year.
    A small price for piece of mind in today’s crazy world. If your interested have a look at our website

  7. Tim says:

    You have touched on my job and hobby!

    I work in insurance and I love horse racing!

    Like Will I self insure for a number of things, pet insurance for example. I think your example of the claim shows the bad side of the insurance industry.

    The only thing I would add is that if you think gambling is less ‘tricky’ you haven’t met my turf accountant!

  8. pam says:

    Hi yes insurance is a gamble but when you keep getting your allotment shed broken into and loosing rotivator/spades etc I am realy thinking about getting insurance as in the long run it will be cheaper

  9. Marie Bevan says:

    Thanks for the post about insurance, we are currently battling with our council over the closure of our site due to contaminated soil? soil test originally commissioned
    by the council but paid for by developers, so you can guess the real motives!
    Any recommendations on ins. companies that cover allotments?
    Our council says their ins. co. will only tolerate near to zero contamination levels, so we’re trying to find out a bit more about this dastardly profession, insurance not councils. {easy mistake to make}
    Marie Bevan

  10. chrissie Duffy says:

    Do I need Allotment insurance? I really must look into this, but 2001 we had a bad house fire and the insurance company were wonderfull same about the builders! Still they got another company to come in and we had 6 weeks in a posh hotel. I found that I had to look at old photos ect to remember what we lost. I became an expert at filling in forms.
    I suppose if you take pictures of whatever tools ect be have it may help.

  11. Marcus Harris says:

    Ken, I realise this post is old but i had to say something as your comment stood out. It wasn’t a raw nerve mate, you’re just rude! As John said its his site and a bloody good one at that. Very helpful and informative. I did a search for allotment insurance today as people I’m afraid have broken in to my shed and others. stole my petrol mower, hand tools etc. It’s very relative.
    Keep up the good work John.

  12. James says:


    Sorry again for commenting on old post, but like Marcus I was searching for allotment insurance, discovered this page and felt moved to contribute.

    The 6 year case sounds incredible, and I agree it’s a terrible situation, but the old adage ‘You get what you pay for’ is never more true than with insurance, as has already been mentioned. The problem with insurance is you don’t find out what you’ve got until it’s too late.

    The idea of self-insurance is also not a terrible one for certain risks, although you have to bear in mind that if you suffer a loss before you’ve built up that cash reserve then you might be left out of pocket.

    Also, brokers are not as bad as Will reckons; 80% commission is unheard of! Most brokers get between 10 and 30. And it’s not just money added onto the premium either, because insurers are happy to sacrifice some income for the cost reductions generated by dealing with brokers, who are by definition experts in their field. You also get expert advice without having to pay directly for it. This isn’t the case across the board though, as ‘you get what you pay for’ with brokers as well, and some classes will always be more expensive with a broker than when you deal direct, like home and car insurance.

    In the end, insurance is prone to scams and poor products like a lot of industries these days, but it is in principle a _good_ thing. You just have to use your noodle!

    Great site by the way!

  13. Eddie Chapman says:

    I am currently looking at trying to get mains water on our allotment. However, some members are concerned that we may face a huge water bill if the supply had a bad leak either through vandalism or a burst pipe. Is anyone aware of any insurance policy that would cover such an eventuality? Most of the allotment insurances that I have found so far are only pertaining to public liability or personal loss.

    Any suggestions greatly received.

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