Is $10,000 combined limit for debris removal and architect’s fees providing genuine protection to home owners?

Picture: Rohan Kelly Source: The Australian

Picture: Rohan Kelly Source: The Australian

Back in July I wrote an article expressing concern that some of the supermarket badged wordings around the coverage for flood. http://www.allanmanning.com/when-is-flood-insurance-not-flood-insurance/

With the bushfires in New South Wales and elsewhere I revisited the wordings to look at some of the key benefits provided by home and contents policies in Australia. Having only a few days ago written an article on removal of debris (refer http://www.allanmanning.com/removal-of-debris/) that was one of the first things I looked at.

I was horrified to see that one of the supermarket badged policies, in fact two through the same supermarket, one a defined events policy and another the optional upmarket ‘accidental damage’ cover has a combined limit for removal of debris and architects fees of only $10,000.

I doubt this would be enough for the average home at the best of times to cover removal of debris by itself but if any home has asbestos building materials and or the home is situated a significant distance from a tip that will take the debris then this level of coverage is going to be completely inadequate. It of course leaves nothing for architect’s fees.

I am not sure what the premium is on these policies and will actually go and get a quote on my own home and compare it to a policy that affords reasonable protection and see what the difference is.

Don

Don Quixote de la Mancha and Sancho Panza, 1863, by Gustave Doré

This is another case where I feel I am Don Quixote but how do we get the insuring public to understand that insurance is not all the same and that it about protecting your greatest assets and your life’s work NOT price.

I suppose I joined the industry at another time. One where the insurers had a social responsibility and looked after their customers. Thas was taught to me at the General Accident and at MBS Pumfrey’s Loss Adjusters. I see more and more sectors of the industry moving away from this.

What causes me the most stress is that in my discussons all around Australia when I raised the issue of the Clayton’s flood cover with insurance brokers I did not know one that realised the limitation in their competitor’s product.

I know of one broker that knows about this limitation on removal of debris and good on him. How can a broker compete on advice if they do not know the facts.

Capture 7

Screen shot from LMI PolicyComparison

The most frustrating part to all of this is that it is not that hard. I found this in less than 30 seconds using LMI PolicyComparison.

I see two major problems with all of this. One Australian home owners are not getting the protection they need or deserve. This is in my opinion after doing claims for over 40 years a disgraceful sub-limit.

Secondly when it comes out in a disaster like this, the whole insurance industry will be once again tarnished with the same brush as we are only as good as our weakest link.

I look at what the Australian supermarkets have done to their supply chain and to the customer so that they can achieve their record profit levels. I see the same thing happening to my industry led by these guys. I wish they would stick to groceries and leave the important job of protecting Mum’s and Dad’s to those that really care!

PS after this rant due to pent up frustration, I can fully understand why PI insurers are so worried about providing cover to those that write blogs! Having said this, I really feel that I must say what I feel for if I get just one person to think about genuinely protecting their home it is worth it.

 

One response to “Is $10,000 combined limit for debris removal and architect’s fees providing genuine protection to home owners?”

  1. Kimberly says:

    PS after this rant due to pent up frustration, I can fully understand why PI insurers are so worried about providing cover to those that write blogs! Having said this, I really feel that I must say what I feel for if I get just one person to think about genuinely protecting their home it is worth it.

    Another great article. Unfortunately the price is something that the public can’t seem to move on from, no matter how much we try to educate them.

    I recently pointed out some flaws in a supermarket policy to a friend. The premium of the supermarket policy was a third to a half of what I could get for him. I pointed out flaws, gave him my experiences with the insurer’s claims service.. but at the end of the day, he’s not going to move.

    Sad, really.

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