A justifiable decision by On Risk/Albion?

Donald Walker · Post by **Donald Walker** » Mon Oct 26, 2009 10:05 pm

A cautionary tale, posted by Dave Morton on the BMAA Forums:

In March of this year I had an engine failure in a Jabiru (carb icing) that resulted in the aircraft overturning after striking a hedge, the aircraft was an economic write off.
Having full hull cover with an agreed value of £38000 a claim was made to On Risk.

During the claim process it was discovered that my medical was out of date (my previous Doctor who now lives in Aus originally signed my DVLA style self declaration medical in 2003 and dated it to expire in 2009 but it transpired that I should have renewed it in 2008 which was my 45th birthday).

I contacted On Risk and their underwriters Albion Insurance ltd (Albion are based in Barbados) and explained that it was a genuine mistake and I honestly believed that my medical was in date because of the 2009 expiry on the form.

I also sent an accompanying letter from my new Doctor who stated that at the time of my accident there was no medical reason that would have invalidated my licence and he fully believed that I was fit to fly at the time of the accident.

Albion/On Risk have agreed that the accident was in no way medically or safety related but have refused to pay out because I was out of date with my medical even though the UKNPPL self declaration medical is ultimately a declaration by the pilot that he/she believes that they are fit to fly and then it is endorsed by their Doctor,(ANO 32A 2(a)(b)(c)(d).
My Doctor and myself believe we have met this criteria in the form of the supporting letter from my Doctor.

The mistake on my original medical was just that, a mistake and I was unaware of needing a new medical on my 45th birthday, this was a completely genuine error.
In theory you could obtain your licence/medical aged 18 and health permitting not need to renew until age 45, this is widely open to human error as in my case.

I offered Albion/On Risk the chance to enter into negotiations regarding a reduced settlement figure in view of the error but they replied that "I have not complied with the ANO at the time of the accident and therefore my insurance is void", each time I contact them I am met with the same thing, that is their only reason for rejecting my claim and as mentioned before they have acknowledged that it was not a safety/health issue.

I contacted the FSA but unfortunately they have no influence because Albion are based in Barbados and are therefore NOT governed by the FSA.

A solicitors advice was sought and stated that we have a very good case, however it is also very difficult enforcing an overseas company to payout, do we continue or not, what a dilemma!.

I had been with On Risk/Albion for quite a while but there seems to be no insurer/client loyalty.
Now I would NEVER use a company unless both the broker and underwriter are based in the UK and are governed by the FSA, had Albion been in the UK the FSA would have been able to assist in this matter.

I have recently returned to a flex and contacted a company to insure it with, decalaring the claim even though no payment was made only to be met with "we had a very similar case and the underwriters paid out without prejudice in the best interests of all parties".

I can only advise for everyone to ensure all their documents are 100% in order and this is purely food for thought, but if you have that "little something" fitted that has no mod approval or if you are flying and the weather turns during the flight and it is no longer a VFR flight then could this potentially render your insurance void?.

As the subject heading states, are On Risk/Albion right regarding their decision or should they show some commitment to their client?.

I would be interested in different views on this matter as obviously I'm a little blinkered, but please no jibes, you can't make me feel any worse than I already do.

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Brian Hope · Post by **Brian Hope** » Tue Oct 27, 2009 6:01 am

A very sad tale, and I am sure we all feel a great deal of sympathy for Dave Morton. I think the telling thing here is that Albion are outside of the UK and beyond the reach of the FSA, and almost certainlyany UK imposed court settlement. A friend on mine who worked his career in insurance (now retired) warned me of the Albion issue when they first came into the microlight/light aircraft market, (Albion were at that time based in Northern Cyprus) the fact being that they were untouchable should they refuse to pay a claim, or go belly up. On Risk's quotes were (probably still are) very competitive, I could have saved several hundred pounds on my insurance, but I decided the risk wasn't worth it, you pay insurance to cover your risk, not to add to it.
The lesson here is not only to make sure your paperwork is up to scratch, but also to make sure you insure with a company that has a legitimate UK base so that they can be audited and challenged by the UK authorities. I have been told that On Risk now use other, UK based insurance companies, if that is so then that is a positive step. If I were insuring through them I'd certainly ant to know who the company covering my aircraft were and where they were based before parting with any money.

Post by **John Dean** » Tue Oct 27, 2009 3:35 pm

I find this a very sad story.

A pilot has an accident and has a medical certificate which is current and as far as the pilot is aware is perfectly valid although in fact his doctor has made a mistake with the expiry date.

Whilst there is no doubt that the insurer is within the terms of the policy to decline payment, I would have thought that any reasonable insurer would have made an exception. After all the circumstances are very different from a situation where the medical certificate has expied and the pilot knows this and still goes flying.

I do hope that there are other reasons for the declinature of which we are not aware.

jangiolini · Post by **jangiolini** » Tue Oct 27, 2009 4:57 pm

Welcome to the real world of insurance!!!
I am with On Risk and I double checked my policy to acertain whether they are governed by the FSA and it appears on the policy that they do! Least ways it says so.
This has got me thinking that if you are unfortunate enough to have a mishap to what level are you going to supply totally accurate information or are you going to economical with the facts!!
Just a thought!!

Nigel Hitchman · Post by **Nigel Hitchman** » Tue Oct 27, 2009 8:52 pm

I wonder if it is worth this guy going after On Risk, rather than Albion. Surely it is OnRisk who sold him the insurance and took his money, they should be providing the service. Is his contract not with Onrisk. Presumably OnRisk are controlled by the FSA.
Or are we in a situation where a broker can sell you something and have no responsibility for what they sell??

Post by **John Dean** » Tue Oct 27, 2009 10:02 pm

The problem is, Nigel, that Albion are sadly within their rights to decline the claim. Your insurance contract is with the insurer and not the broker.

John A, you may well be covered through OnRisk but with another insurer (other than Albion) who are subject to FSA regulation.

Donald Walker · Post by **Donald Walker** » Thu Oct 29, 2009 9:24 pm

OnRisk is now using Alpha Insurance in Denmark, instead of Albion.

Their policy guidance notes include this wording:

3.Insurance Undertaking
Alpha Insurance A/S is authorised and regulated by Finanstilsynet (The Danish FSA). As an insurance company authorised within the European Union Alpha Insurance A/S ispermitted to conduct business in the United Kingdom and authorised by the FSA under reference 451184. You can check this by visiting the FSA website at http://www.fsa.gov.uk/consumer.

Unfortunately, this doesn't help Dave.

Donald

Rod1 · Post by **Rod1** » Mon Nov 02, 2009 9:45 am

My understanding (and please correct me if I am wrong john) is;

1 The clause used to avoid payment is common in most (all?) GA insurance. Any UK or European insurer could have done the same. See quotation below;

“An owner-pilot's insurance policy will contain a 'Condition Precedent' to making a claim under the policy in these or similar words:

The Insured shall comply with all air navigation and airworthiness orders and requirements issued by any competent authority affecting the safe operation of the Aircraft
and shall ensure that
(a) the Aircraft is airworthy at the commencement of each Flight;
(b) all Log Books and other records in connection with the Aircraft which are required by any official regulations in force from time to time shall be kept up to date and shall be produced to the Insurers or their Agents on request;
(c) the employees and agents of the Insured comply with such orders and requirements.
Bear in mind that, given how widely the clause is drafted, if the insured fails to comply with any of the above insurers may refuse to pay under the policy even if the failure had nothing whatsoever to do with the accident.”

2 OnRisk now use a European insurance co, so are covred by EU law. However I do not think this is relevant to this case as UK insurance co could have refused to pay out under the same clause.

Rod1

G.Dawes · Post by **G.Dawes** » Mon Nov 02, 2009 10:00 pm

With an aircraft with which I had dealings, One of the pilots had a landing accident,damaging the engine and lower fuselage. The group made a claim to their insurers( A well known UK company) and the loss adjuster came around to check over the AC and pilots documents. The pilot however had an FAA licence and was a week out of biennial flight check.
Once this was found the Group was told to retract the claim as it was FRAUDULENT and that action would be taken against them unless they did retract it. The matter was an oversight but the threat remained.
They had to pay for the repair or rather the unfortunate pilot did by losing his share to pay for it.
ALL insurers WILL find something to get out of paying if all the dots and T crossing is not in perfect order. And there is no chance of getting back your premium as a claim can end the period of insurance even if no payout is made.
Just watchout and keep everything in order.