At the recent Insurance Council (ICNZ) conference EQC Minister Gerry Brownlee voiced his opinion about the level of understanding amongst homeowners about the move to sum insured as opposed to replacement value.
More importantly he stated the important role insurance brokers have in helping buyers to make good decisions.”
While he praised the many good stories to have come out of the Canterbury disaster as being ‘entirely due to insurance and your industry’, he said it was essential that consumers understood what they were covered for and what triggered those covers.
“In that regard, I am concerned to see that the move to sum-insured residential cover is better understood by households,” he told the conference attendees.
More damning on the topic was Sue Chetwin, CEO of advocacy group Consumer NZ.
Chetwin said when they published their article on sum insured it had created the most comments they’d ever had on their website, none of them particularly complimentary of the industry.
“It’s been a change to consumers, and it has been quite difficult to work out how their houses are going to be insured now,” she said.
“We found that the industry calculators aren’t that easy and when we sought experts to assist we found a really wide variation in the prices for valuations that were given for people’s properties.
“It will be the consumer who suffers either by way of underinsurance or the insurer refusing the claim.”
These comment highlights the fact that many households in New Zealand (reported to be 75%) hadn’t adjusted their sum insured.
Source: Insurance Business NZ Online
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