Brokers fighting for fairer insurance payouts
Friday, 18 January 2013 00:00
Brokers fighting for fairer insurance payout
New research has revealed that insurers are becoming stricter on paying claims in the economic downturn. In the research from the British Insurance Brokers’ Association (BIBA), 90% of insurance brokers believe that insurers are becoming stricter on paying claims, mainly because of the economic climate and fraud.
Nearly two thirds of brokers said that they have had to fight harder to get claims paid and nearly three quarters of brokers have overturned a claim rejection by an insurer in the last year.
Nearly 70% have secured an increased claim payment for a client, with 43% of brokers saying that the average percentage uplift on claims that they regularly negotiate on behalf of clients is between 11% and 20%.
Eric Galbraith, BIBA Chief Executive, said: “The economic climate has led to stricter policy interpretation and anti-fraud systems by insurers meaning that customers are having claims reviewed in more detail. The research demonstrates the importance of having a broker to fight your corner and represent you at claim time.”
Graeme Trudgill, BIBA’s Head of Corporate Affairs, added: “You only find out the value of your policy at claim time. Brokers not only support you in a claim but can help ensure that you purchase appropriate cover and make relevant disclosures to minimise the risk of claims being rejected.”
In the research, brokers highlighted examples of a claim worth £35,000 for a stolen car which was initially rejected but where the brokers’ knowledge and involvement ensured the claim was paid in full, and a commercial theft of stock claim where the claim payment increased by 40% following the broker’s involvement.
CASE STUDY
An armed forces family were posted overseas. Whilst abroad they put their belongings into storage. When they returned, their belongings had been damaged so they took steps to claim from the insurance policy of the storage company. The claim was unsuccessful due to policy wording interpretation from the insurers and the family was offered £4,000, although their belongings were worth significantly more.
The family made contact with the armed forces trade press who sought advice from insurance brokers. An insurance broker became involved and helped the family navigate the policy wording and evidence that their claim was valid. The broker’s involvement and input resulted in the claim being settled for £12,000.