What one client thinks of his underwriting agency and the insurer behind them

Policy Violation road construction barrier sign warning rule regEarlier this week I suggested that the time had come for those handling claims needed to be regulated to ensure that adequate training was being given so that the insuring public were being treated fairly by the industry when they needed the protection of their policy most.

For the past 3 weeks I have been travelling around Australia delivering sessions which looks at emerging technologies and the threats I see facing the industry. I have been overwhelmed at story after story by brokers frustrated to the hilt who are fighting for fair treatment of valid claims.

Let me share just 2 with you and a general observation. The first involves roof damage 8 stories up. The cost of repairs was $80,000 to meet the manufactures specification of the module roof construction. The Insured came up with an alternate solution of leaving the damage as was and just covering the entire strip with a flashing which would be screwed to the building and just beyond the damaged section of roof. The cost $7,500 and the saving therefore $72,500. Rather than be delighted with the result the adjuster said that the installation of the flashing was betterment and refused to pay anything. This is clearly not betterment but a clever way to safely and far less expensively repair storm damage.

The Insured could have insisted on the original repair but walked away from the claim, fixed it himself and changed insurer on renewal. The broker was lucky to retain the significant account. The client will never insure with that insurer again and the broker is loath to use the insurer either. The ongoing loss to the insurer is hundreds of times greater than the amount that claims officer and adjuster think, and probably congratulate themselves on, in saving.

insurer sharksIn another, the Insured is sending out the following image warning people of dealing with his insurer(s). This involves fixtures and fittings fitted by the tenant which the Insurer is saying the landlord has no insurable interest in despite their website saying the exact opposite.

The general observation  is that a number of clients that have a small business interruption claims and have been put through the wringer with the usual standard over the top document list and when this information is provided another even longer list of questions and documents is received. They tend to give up, feel business interruption is a waste of money as it does not respond when it is needed and refuse to take it out on renewal.

Not only is this lost premium to the insurers but reduces the protection afforded the Insured. Urrr!

We have to remember that a customer who has a bad experience tells 10 times as many people as someone who has a good experience.

All of this is reflecting extremely badly on our industry. Of course this is not just me. The study by Queensland University of Technology that I covered earlier in the year saying that the claim process was more stressful than living through the floods is a sad indictment on our profession and is leading to the lowering of the trust the public has in brand insurance.

Bring on the regulation with penalties for those that do not honour valid claims as they should.

Leave a Reply

Your email address will not be published. Required fields are marked *