I write as someone who has been handling insurance claims for over 45 years and from that perspective I think the whole idea is flawed. For most of us in the Australian economy, our home is our most important asset, after that comes our motor vehicles. We invest 10’s of thousands of dollars into these assets, often with a home loan or other forms of finance to acquire the asset.
Particularly with home & contents insurance but even with comprehensive motor insurance there are differences between the breadth of coverage afforded by the policies.
I have written about many of the pitfalls in the cheaper policies, such as texting while driving exclusions or driving into a flooded road way in motor and things such as landscaping exclusions regarding renovations, consumption of alcohol, the list goes on and on.
In those 45 years of handling claims, only 4 times has anyone mentioned the premium at the time I visited them after a claim. In each of those occasions it has been “I’ve saved this much by switching insurers, but tell me again Allan how much has this cost me?”, that is it has never been a positive experience, it is always one of regret that the consumer has purchased on price.
What really matters at the end of the day is that the coverage afforded by the insurer and their policy, the financial strength rating of the insurer and their claims service.
It is for these reasons that I have written my books on insurance such as “It may happen to me – The essential guide to general insurance” and the children’s books “What’s Insurance? – How insurance protects your stuff”, this blog, my son’s YouTube series ‘InsuranceBites’, and two comparison websites PolicyComparison.com and ClaimsComparison.com. To create a website that just compares price flies in the face of all of this effort and I would simply ask the government to have the discussion with the FCA (Financial Conduct Authority) who are doing their best to urge consumers to not just buy insurance on price, but make an informed judgement on the quality of the policy and the claims service and that is why we are being encouraged to take our products such as those mentioned as well RiskCoach and BICalculator.com to the United Kingdom.
Similarly, I have grave concerns about the whole idea about the big switch when it comes to insurance. With insurance we are not talking about buying a refrigerator or electric power. We are talking about something that should be tailored to the individual needs of the insured, how do we pool someone who needs flood insurance, to someone who is in a bush fire zone, etc. The whole idea of general insurance brokers is to bring together a group of insureds through the one banner and place the right cover with the client, obtaining volume discounts. The big switch ought to leave general insurance to licensed and qualified general insurance brokers rather than converting this all important protector of individuals assets, our communities and our very economy based on the cheapest price.