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Chauffeur warns of income protection flaws

For any self-employed chauffeur, it’s paramount correct income protection insurance is secured in case the worse happens – but a chauffeur is warning the industry to check their insurance pay-out terms following a recent case.

The policies which offer financial protection to chauffeurs who want to cover themselves and their families against the potential financial implications of being unable to work due to health problems can be a mind field, but a chauffeur has found out the hard way that not all of them are worth the paper they are written on.

Chris Hargreaves, 32, (pictured) was stunned when Scottish Provident declined his claim for loss of earnings even though he was unable to run his chauffeur business for six months. Mr Hargreaves spent three months in and out of hospital after he suffered internal bleeding and a blood clot on his lung. He believed that after paying £13 a month for five years for an income protection policy that he was sold by a broker, he would receive a payout should doctors decide that he was unfit to work. He had statements from three consultants and his GP confirming that this was the case. But his claim was turned down.

He says: “The broker never explained to me that this insurance would not cover me for not being able to do my own job, just a list of set tasks. The financial pressure that this has created has caused serious problems for me and my wife.”

To qualify for a payout, Mr Hargreaves needed to prove that he was unable to complete at least two of six listed work tasks for six months. These were: walking 200m on a level surface with a stick or other aid without stopping or severe discomfort; picking up 1kg from table height and carrying it for 5m; using a pen, pencil or keyboard with either hand or any aids; hearing well enough to understand someone speaking a common language in a normal voice in a quiet room with a hearing aid; being understood in a common language in a quiet room; seeing well enough to read 16-point print using spectacles or other aids.

He says: “You’d have to be comatose to be unable to do two or more of those tasks over a sustained period. I was shocked that my inability to do my job was irrelevant. I took out the policy in good faith and, as I was so ill, I thought that it would be a perfect case for a valid claim.”

The insurer argued that the fact that Mr Hargreaves was unable to work was not relevant as the policy was a working tasks income protection policy and not an own occupation policy.

A statement from Scottish Provident said: “This means that in the event of a claim he must satisfy the criteria against the tasks set out below rather than his ability to work. The criteria had not been satisfied. Although doctors had confirmed his inability to perform the tasks, they had not provided any explanation as to why the tasks were not achievable.”

Roger Edwards, proposition director at insurance company Bright Grey, says: “Whilst this type of cover is clearly not as desirable as ‘own occupation’ cover, it can still provide a useful level of financial security.

He added; “All policies make it very clear what they will pay for at the outset and providers work extremely hard to explain this in plain English. These explanations appear very clearly in the key features document and in the policy itself, alongside explanations of other important features such as the deferred period – the period of time following the illness before the income becomes payable.”

Mr Hargreaves adds: “The issue with these policies needs talking about as they are flawed as 55% of all claims made against them are refused. Would you buy car insurance with a four in ten chance of getting paid out?”

Chauffeurs are being urged to check the small print of policies they may hold and contact the insurers to make sure they are protected.