Broker champion slams domestic market “tricks”

Broker champion slams domestic market “tricks”

Broker champion slams domestic market “tricks”

Brokers have been urged not to shun the domestic market as profit generator as an investigation has revealed that consumers are often exposing themselves to greater risk by switching providers without seeking advice.

“Over the past few years consumers have been tricked into believing that insurance companies are the enemy and that they need to keep them honest by asking for a discount or switching providers,” said Kate Fairley, the director and creator of broker champion website Get Informed.

“Consumers don’t realise they could be exposing themselves to greater risk by purchasing an inferior product. They believe that all insurance policies are the same, but this has never been further from the truth.”

Get Informed conducted an investigation into the different motor and home insurance policy documents of various insurers. In examining the definition of flood, it found while the definition of flood has now been standardised, the definitions of other insurable events have been altered in some cases.

“Under all brokered policy wordings storm damage includes rainwater, hail or wind, and usually covers damage to gates, fences, retaining walls as well as landscaping, external blinds and awnings,” said Fairley. “Most direct insurers exclude storm damage to all of these things, but, more importantly, the insurer we investigated has restricted their definition of storm so that damage by wind alone is not covered under their policy.”

Get Informed also found one car insurance provider has added a general exclusion for all incidents which happen off-road, while another had included a clause which allows them to ask the insured to contribute to the cost of repairs based on the wear and tear of items such as tyres, engines and paintwork.

Fairley said not only do brokers have the opportunity to establish a relationship with the client and ascertain exactly what their insurance needs are but can also assist business owners who have not consolidated their insurance program with one broker.

“Brokers should never underestimate the potential value of your clients.Telling your customer about relevant differences in cover can stop them from shopping on price when their renewals are due, but can also generate referrals.”

 

Five questions brokers should ask to retain domestic business

  1. What’s the main reason you have insurance?

Follow up their answer with a policy benefit. For instance if they just want to be covered for a total loss scenario, let them know about the mortgage discharge costs which are paid on top of the sum insured in a household policy, the higher removal of debris limits and the temporary accommodation for pets.

  1. What are your hobbies? What do you do for fun?

If they’re a collector point out that often collections are limited to $5,000 or less.

  1. What excess have you chosen, and why did you make that choice?

It’s only recently that direct insurers have used increasing one’s excess as a marketing strategy to make their premiums more attractive. By saving $50 up front, the policyholder could be costing themselves $300 when they need to claim.

  1. Did you know that you have cover for items outside the home?

It’s more cost-effective to have the higher level of cover than to pay for additional cover outside the home on top of the basic policy. Explain the $10,000 limit on valuables and that items such as medical equipment and computers aren’t limited at all whereas some direct insurers limit these items to $1,000 per item.

  1. Did you know that when you have a claim we will help you through the whole process?

As a broker you know the details of their policy wording and can often get them a larger pay out after a claim because you represent them, not the insurer, and you also have specialist knowledge.

3 Comments
  • Peter Finn 19/06/2013 3:09:30 PM
    It would be a good idea for 'Get Informed' to get themselves informed on how difficult ASIC has made it for Brokers to deal with 'Retail Clients' - especially in the area of domestic Householders.

    Insurance Brokers were, virtually, forced to 'turn their backs' on dealing with this level of client because the return is not worth the risk.

    As a result of ASIC's actions, the outcome that Brokers predicted, came about and small ' retail Clients were left unprotected, as far as obtaining professional advice is concerned.

    I, certainly, can't see Brokers queuing up to sign up this type of client.
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  • Bob Wonnacott 19/06/2013 5:08:43 PM
    100% agreed! I have been using a similar phrase for a long time to that mentioned concerning consumers believing that all policies are the same with the addition that they believe that insurers are charging different premiums for that same product - which of course adds to the negativity that many people have about the insurance industry. What I want to know and what we should all be asking is why is no one doing anything to educate the public? Why are most of us part of an association such as NIBA, Steadfast etc if those associations are doing nothing to educate the public on our behalf and if they answer as they usually do 'it's the cost' then how can Real Insurance afford to run countless adverts on practically every channel (including Fox) practically all day long whilst providing inferior products with inferior premiums? And........maybe the most important question of all.....how come ASIC is allowing adverts to promote insurance products to the public the way the direct market does in complete contradiction to the way we are allowed to present ourselves and insurance under the compliance rules and regulations. Is it not possible for INSURANCE BUSINESS as a voice of our industry to interview ASIC and our associations and get some answers to these questions with a view to something being actually done rather than just verbalised on paper? Maybe INSURANCE BUSINESS could be the catalyst that starts the tidelwave of action!
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  • Kate Fairley 21/06/2013 6:20:36 PM
    Thanks Bob, that's why I've launched Get Informed. I didn't see a lot being done for my industry and decided to take action. I have a lot of positive engagement with consumers and business owners on the social media pages, and have made traction with Today Tonight in producing a story around supermarket insurance products.

    Peter, today's Buyer Beware on social media was targeting consumers who may run a business from home and the key things to be concerned about: https://www.facebook.com/giinsurance

    Many brokers would agree with you however it's my personal belief that you should always value add to your service offering no matter how much business a client places with you.

    It's about giving free information to consumers so they understand what an insurance broker does, and the next time they're having a conversation around the BBQ there's someone there to tip the scales in favour of brokers.

    The damage to our industry has been done over a long period of time so it's going to take a lot to fix, and it has to be done from all sides, domestic included.
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