PART 2 of 4 PART SERIES - SHOPPING FOR INSURANCE, THE GOOD THE BAD AND THE UGLY

The point of shopping around is to get the best value for an insurance cover that protects you the way you want it to.  Sounds simple but if you read Part 1 of this series you’ll know it is anything but simple.

Limited knowledge may mean bad choices

Here are 3 reasons why it’s so hard for you to shop around when it comes to your insurance cover.

1. Limited time

You have a limited amount of time. As an insurance broker I advocate that it is worth spending extra time on something important like protecting your assets.  For New Zealanders our homes are often our largest investment.  But how many companies will you call? How many can you think of off the top of your head?  And how much time are you willing to put in doing the hard yards calling several of them.

2. Limited knowledge

Most people are not experts in insurance. Even if you know insurance pretty well, it can be hard to figure out if you’re sufficiently covered or if you’re over-insured, or if the cover you have purchased will cover you as you expect it to.  Limited knowledge may mean you make a bad choice in how your things are insured.

3. Tough to compare

It’s difficult to compare quotes because you’re not comparing apples with apples.  For instance, there is not a standard definition for ‘replacement’.  Understanding the differences between companies adds another complexity making it even harder to compare one policy to another.   Keep in mind a lot of companies will change or alter their policy wordings to exclude claims they do not want to cover or to allow them to settle claims as they would like to.  A good example of this is how insurance companies treat gradual damage caused by water.  Most exclude this as a standard exclusion and then, by way of extension, provide a small amount of cover.  Sound confusing? It can be.

As my wife will confirm, I don’t profess to being the best shopper in the world but, having been an insurance broker for a decade and worked with hundreds of clients from the initial purchase of their insurance policy through to claiming on it, I do know the hot spots and areas where you can get caught.  A good broker has expert knowledge of insurance and different policies.  This makes it much easier to compare policies.

If you called me today to help with your personal insurance the first thing I’d do is look at what you have already and see what is important to you and where you may want to focus your attention in terms of your insurance cover.

Check in next week for Part Three – An Easier Way to Shop for Insurance.

Part 1 - Shopping for insurance, the good the bad and the ugly

Part 3 - An easier way to shop for insurance

By Stu Cooper, previously National Domestic Manager @stu_cooper