Insurance Cover- Don't assume....

While having some insurance cover in place is better than having no insurance cover in place, having the most cost effective insurance cover in place for your needs is a much better solution.

Stories abound of insurers not paying out on their policy when a client comes to claim.  This casts the 'big bad insurer' in a grim light.  Sometimes, this may be valid.  But from our personal experience, insurers only refuse to pay out a claim when:

1. There has been a less than honest declaration of the insured's situation when taking out the policy (fortunately, we have never had this situation with any of our clients to date.)

2. The insurance policy simply does not cover that claim situation.  This is a far more common situation that occurs when claims are denied.

Sometimes of course 'insurers' or 'ACC' may choose to 'obfuscate' and make it difficult to make a claim, frustrating the policy holder, and enabling only the most determined claimants to have the claim paid.  We see it as our job to ensure that our clients are put in that position with any insurance contracts that we have assisted them to put in place.

Understanding what your cover is

The key to making insurance work for you is to fully understand what your cover is for.  This is a core reason for working with a specialist insurance adviser, who is continually updating their knowledge on the solutions available, what cover does exist and how that can work for you.

As a result, at Moneyworks, we specialise in understanding and recommending the life, trauma, tpd, health, income protection, mortgage protection and redundancy insurance covers.

Before we recommend any insurance to you, we have carefully read the policy wording, and clarified with the insurer the meanings.  Therefore, if you are in a situation to claim, we can readily assist you in understanding whether your policy will cover that situation.

As an example, a client recently contacted me to ask for information on their income protection insurance and whether it applied to a health issue that they have.  I was able to quickly advise that the 'hospitalisation' benefit is likely to be claimable on, but as the wait period was 13 weeks (chosen for cost/benefit purposes), and they were only likely to be off work for 6-8 weeks, that this benefit was not likely to be available.

This quick discussion alleviated any confusion, and provided certainty to client (who has sufficient cash reserves to cover the time off work).  This is the job of an insurance adviser.

Similarly - we are not specialists in Fire & General insurance cover (house, contents, vehicle, boat, professional indemnity, public liability etc.)  We use a specialist insurance broker for our own cover, and refer our clients to that broker.  We know from experience that they will take the stress out of any claim situation for the insured, and will always look for the best cover for clients.

Fire and General insurance cover is reviewed on an annual basis, so the insurers may change from time to time.  Life insurance cover however, is usually recommended for a long period of time, so there are different things to take into account in recommending cover (like the corporate attitude to claims - which can change if an insurer is sold to an organisation with a different attitude.)

A recent article in the Sunday Star Times highlights how easy it is to get it wrong with insurance cover.  While this article focuses on Fire and General insurance cover, the points are equally valid for Life, Trauma and income protection type insurances.