If you’ve ever been on a beach overseas? You would have noticed how the shops now come to you. Traders with glasses, clothing, massage and even tattoos. When they walk up to you introduce themselves, they always start with “Best Price”, which may be fine if you need new glasses and a tattoo but what about when you need insurance.
Best Price does not mean the best value for your Business
Business insurance has always been a grudge purchase for small business, and in a lot of cases, they will never make a claim.
Often to reduce premiums businesses will reduce their cover to save, they will go for high excesses and even pay their insurance off monthly to reduce the burden on the cash flow.
But simply basing an insurance purchase on price is dangerous and gives me some concerns.
What’s missing to make it “Best Price”
With cheaper insurance policies it’s often the exclusions where the insurer will make their savings.
Exclusions may exclude some of your business activities, cover options or circumstances that may result in a claim being denied.
Direct insurers will often reduce levels of cover in so called inclusions, for example, they may claim to cover flood, however, they limit the cover to $20,000 and only where a flood is the result of an act of God.
Direct insurers are not obliged to tell you what their credit status is, what level of cover you require or how their claims service compares.
Why Claims are the best gauge of an insurers worth
In my experience, the real test of an insurer is at the time you need them the most, at the time of a claim. Then you want speed, communication and clarity. Insure 247 has found in the last 12 month Insurers on average for a commercial claim is 42 days, this is poor service by anyone’s estimation.
Some have started to use loss adjusters on simple claims, in what appears to be a way to make it difficult for clients and reduce the insurer’s liability.
Without a broker to fight for your claim you are alone in this process, you have to have a good understanding of the insurance law.
Do individuals really believe that the insurers have their best interest at heart? In my experience, all insurers put the needs of their shareholders ahead of their insured.
If you want the best value
Next time you are about to make an insurance purchase get a number of quotes from a number of insurers, ask your broker or the insurer what’s the insurers’ claims rating, or use http://www.claimscomparison.com/.
Always compare to save
Use sites like https://www.quotesonline.com.au to compare business insurance or https://publicliabilitycomparison.com.au/ for public liability insurance and don’t wait for a renewal or a claim.
Stephen Sloan
CEO and Adviser Insure 247 Pty Ltd
Digital marketing pioneer Sales, marketing and business development roles in natural health, medication reviews, telecommunication, and insurance.
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