Policyholders rely on own estimates rather than professional valuations

Policyholders rely on own estimates rather than professional valuations | Insurance Business

Policyholders rely on own estimates rather than professional valuations
More than four and five Australians are underinsured and four out of ten homeowners rely on their own estimates when working out the replacement cost of their homes, according to results of a survey commissioned by the ICA.
And one in 25 homeowners do not have building insurance.

This comes as the association yesterday launched national consumer initiative, Understand Insurance, that demystifies insurance in a bid to empower consumers to make better and more informed decisions.

ICA CEO Rob Whelan said the initiative’s website would guide Australians of all ages through the process of buying general insurance, finding the right policy, ensuring they have enough coverage and making a claim.

“Insurance is not a commodity. It’s a promise. It allows people to take control of their lives against life’s many uncertainties,” Whelan said.

Quantum surveyed more than 900 Australians, on behalf of the ICA, also found that 23% of all homeowners and renters have no contents insurance at all.


Other key findings of the Understand Insurance survey include:
  • 40% of homeowners rely on their own estimates when working out the replacement cost of their homes, and 68% make their own assessment of their contents, rather than seek a professional valuation
  • One in four Australians is unsure what is covered by their home and contents insurance policy
  • 48% don’t consider exclusions when selecting their building or contents policy
  • 44% per cent admit to not reading their insurance policy in detail
  • 39% do not update their insurance when they buy a new asset
 
“The Understand Insurance survey reveals far too many Australians don’t properly value their assets, and choose their insurance policy based on price rather than the most suitable coverage,” Whelan said. “They don’t understand how insurance works, or they believe they can cover the replacement cost if something goes wrong.

Understand Insurance slices through industry jargon and ‘tech speak’, and makes it easier for consumers and businesses to make better decisions about protecting their most valuable assets.”
Financial Counselling Australia executive director Fiona Guthrie welcomed the insurance industry taking the lead in helping the community to better understand insurance.

“Making poor decisions about insurance can have devastating consequences, and for some households it can mean the difference between financial oblivion and financial recovery,” Guthrie said.

Understand Insurance provides consumers with a comprehensive and credible source of information. It helps guide them through the insurance process, from understanding their insurance needs through to making a claim.

“Financial counsellors work in community organisations and help people in financial difficulty, and I hope. Understand Insurance will have a positive impact on lowering rates of underinsurance and non-insurance in the community.”
Whelan said Understand Insurance examined almost all types of general insurance – including home, contents, business, vehicle, travel and pet insurance – and explained how they work and how consumers could get the most out of their purchases.

It also explains what to consider when making a purchase or renewing a product, how to make a claim, and what to do in a dispute with an insurer or broker.

For the full findings of the Understand Insurance survey, visit www.understandinsurance.com.au