The Problem with the big boys and their preferred suppliers
Once upon a time, my client made a claim for a damaged diamond.
She was insured with John Lewis.
The epitome of what excellent customer service. The bastion of the customer is King. A quality company.
Or so you would imagine.
Her claim was agreed and she was offered £5,800.00. A fair price that would enable her to replace her diamond.
What she actually received was £3,272.00
Here’s how it works:
The big boys, like John Lewis, M&S, Admiral, Direct Line - in fact most of the large brands you can find on the comparison websites - are not interested in getting involved in your jewellery claim. It’s not their bag! So, they farm your claim out to a third party - their “preferred supplier” - a company called Loss Management Group (LMG).
LMG buy your claim from the big branded insurer and try their utmost to reduce your claim in a number of ways:
They will find something in the small print to decline or reduce your award, such as a stipulation on how you store your jewellery or a clause stating you MUST have a valuation done every 2 years.
They will offer you a voucher to go into one of their preferred suppliers to replace your item(s) - which is fine, should your jewellery be off-the-shelf, standard jewellery that can easily be replaced.
They can be persuaded to give you a cash settlement if you can prove that your jewellery or watches cannot be replaced at one of their preferred suppliers. The cash settlement you receive will be SIGNIFICANTLY less than the original award amount.
My client asked for a cash settlement. She wanted to choose her own jeweller.
She was Given 45% less than her claim amount!
She complained heartily. She spoke to John Lewis and had her complaint escalated to Tier2 (whatever that means!) but at every stage, they told her they could do nothing. The claim was being handled by LMG and they were John Lewis’ preferred supplier.
It sounds like a nice thing, doesn’t it - a preferred supplier? I have come to realise though that it is instead a wolf in sheep’s clothing.
Having your Claim Handled by LMG Does not benefit you AT ALL.
The big branded insurance companies benefit, because they take your premiums and then pass you on to someone else when they’re asked to step up and help you when the worst actually does happen.
LMG benefits massively - from huge discounts from preferred suppliers and by putting their profits above you and your claim.