What is the price for peace of mind?
If we aren’t being bombarded with political advertisements enough at the moment, we certainly are with advertisements selling motor insurance purely on the saving that can allegedly be made.
Anyone who handles insurance claims on a day to day basis will tell you that no one remembers what the premium they saved was when a claim occurs. Everyone wants the Rolls Royce cover and service.
Earlier this week, a friend of mine came to me with a motor vehicle claim in which he is involved at no fault. He was driving down a major road when another car drove straight through a stop sign and immediately in front of him. As a result of the collision his car is a write off.
When I read his policy, I see that rather than being Insured for market value, it is Insured for a Sum Insured substantially less than the true value of the vehicle. The Policy also states that despite the common law position that the Insured should be fully indemnified, the salvage belongs to the Insurer and not to him to offset the difference between the market value of the car and the Sum Insured.
The saving that he has made in premium is only a fraction of the loss that he potentially will suffer and it would be more than offset by the cost of sorting out recovery action against the negligent third party should they indeed be Insured.
It is for this reason that Claims Comparison was invented so that an unbiased assessment of the Claims service at various insurers in the Australian market can be used as one of your decision criteria when taking out cover. Claims Comparison is currently seeking your feedback on how any claims you have been involved in have been handled and if you would like to have your say, please use the link here.
My final comment is that insurance is about protection, not about the cheapest price. If you are in any doubt about the quality of the product you are looking to purchase, please speak with your insurance broker who will know the range of products and have the benefit of using LMI PolicyComparison which provides a detailed analysis and comparison of the features and benefits of over 3000 policies available in the Australian & New Zealand markets.