I was amazed to read a recent survey that found a majority of Australians believe not only do insurance companies not pay up after major disasters but they believe that most try to underpay when they do pay out a claim.
The survey also found a great deal of confusion amongst people on what their home insurance actually covers them for.
For example, around half the people surveyed weren’t sure if their home insurance would cover them for a bushfire (as opposed to a “house fire”) and a similar number said they were unsure if they were covered for tornadoes and cyclones!
In response to the release of the survey by UMR Research, it wasn’t long before a spokesperson from the Insurance Council of Australia set the record straight by declaring that in general, insurers pay out more than 98% of all claims received, totalling about $110 million dollars every day.
In some ways perhaps I’m not surprised by this perception, as we only see the stories in the news about the people who weren’t paid their claims or the people who were underpaid. When was the last time you saw the opening story in the news being “Insurers paid out another $110 million in claims today!?”
But it does highlight the situation that generally people tend to know more about what their mobile phone plan covers than what the insurance on their biggest asset covers.
It’s here that I really see the value of having a good insurance consultant to deal with. Having someone who knows policies, what they cover, what you get for your money and all the “ins and outs” of the industry is invaluable.
I know that no one really looks forward to ploughing through long lists of terms & conditions of policies to find out what they are really covered for, but that is one of the jobs that I do and I see that as an important role I play for clients. I do this work to lighten the workload on you.
Working in the industry, I am aware, as are others that Australians do tend to hold insurance companies in a bit of contempt, which is often unfounded. But when I read that there were 11 declared “catastrophes” across the country during 2011/12 and that during that time, Insurance companies paid out a massive $5.4 billion in claims I know that the industry does back up its promises.
Essentially, if it didn’t back up its promises, it wouldn’t exist, because people would not keep paying premiums to insurance companies if the majority of the time the company never paid out claims.
If you’d like some advice on what insurance policies actually cover or need advice on what you’d like to have covered, please do not hesitate to contact me.