Put policies online for greater client takeup?

Put policies online for greater client takeup?

Put policies online for greater client takeup?

Many Australian insurers already offer online access to insurance policies and policy disclosure statements but these tend to be for car, home and travel insurance, and often the question is asked surrounding these ‘have you read and understood the policy?’.

Given the complexities within a commercial or business policy would placing these documents online threaten or enhance the role a broker plays in providing advice and assisting clients in selecting the right insurance product.

This debate is currently taking place in parts of the USA where Rutgers University insurance law professor Jay Feinman says insurers should be pushing more policy details online.

Feinman says insurance in the USA is such that many people don’t know what they are buying until they have bought it, despite choosing their level of cover, excess and premiums up front. He says people taking insurance are not able to read the fine print until after they have become a customer.

However he points to a scheme in Nevada where the state regulator publishes the standard policy forms from the states’ 10 largest home and car insurers allowing people seeking insurance to shop around to compare policies.

Feinman admits this step alone will not tackle the problem of insurance education with many people choosing not to read but consumer groups could take on the task of creating guides that compare and rate the benefits of one policy against another.

While it appears that the Australian market is ahead of the USA in placing information online the issues around insurance education and understanding seem to be similar.


Would publishing the details of common policies boost the work of brokers and cause more people to seek professional advice?

With many insurance policy details already available would there be a benefit for the insurance broking industry to have a regulator publish standard forms?

Given the recent natural disasters across Australia would this type of online listing of policy remove some of the complaints surrounding claims?

  • Lukey Luke 12/02/2013 2:51:10 PM
    I think the issue is many people don't realise insurance is actually a legal contract. The PDS has a section of coverage provided, exclusions, conditions, definitions etc. We all know that clients don't read them as it is, and they want a "facts sheet" or quick check list, however due to the complexity of the policies it's not always that simple. i.e - Is fire covered? - Yes, subject to the terms & conditions & exclusions blah blah. Doesn't really tell you much does it?

    Perhaps putting business pack wordings or liability wordings online (I know some insurers who already do this for the general public) would make clients realise just how complicated insurance is, and perhaps they would seek advice from a broker? Or perhaps they would continue to shop on price, and blame anyone but themselves when they realise at claim time that you only get what you pay for.
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  • Ruth 12/02/2013 3:00:04 PM
    I think there's too many factors to consider before being able to answer if publishing details of common policies would boost work for Brokers.
    It could possibly boost for Brokers if the consumer is finding it all too overwhelming (even with the comparison) and seeking further advice, but that would only benefit the Broker if premiums where then also competitive, otherwise Brokers are just offering free advice - which I suppose you could say is 'boosting work' for Brokers, just not boosting business!

    So is it boosting work of brokers or just lowering the respect of a Broker's professional work?

    Regulating policies will either kill the broking industry or rid us of the direct, sometimes dodgy, Insurers.

    Given the recent disasters, flood in particular, where Insurers are now at least offering a flood option is only resulting in consumers not insuring at all as they're unable to afford the five-fold premium increases, so having standardised policies across the board will only result in people have no insurance at all.
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  • Peter Vickers 12/02/2013 3:56:35 PM
    Where have you been for the last 10 years? Everything is now found on the internet from your iphone5 or android!
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