Did you know that less than 10 percent of Insurance claims are not paid, and when there are, it’s often because of an avoidable mistake made when the policy is taken out?
Insurance can be a complicated topic – especially if you’re not familiar with the jargon. Here’s a quick outline of the most common Insurance mistakes – and how you can avoid them.
Ever heard of ‘unintentional non-disclosure’?
You may have noticed that getting insurance comes with long forms and, for many good reasons, a lot of questions.
In the insurance world, there is a process called ‘underwriting’: in short, the insurance provider needs to gather all relevant information about you, including any past medical conditions and habits (smoking for example), to determine your premium rates and policy conditions.
Without guidance, it’s easy to forget certain details when filling in insurance forms, or to overlook details that seem insignificant. But missing details considered important by an insurer is what is known as non-disclosure: i.e. leaving out information that may have otherwise impacted the cost or terms of cover.
On the whole, New Zealand insurance companies are pretty reasonable in assessing whether someone making a claim unintentionally missed certain details when applying for cover. However, this is not an absolute and non-disclosure (unintentional or otherwise) could result in a claim being declined.
The solution? Carefully think through the detail when completing insurance forms; check out information you’re not sure of; and of course, you can always talk a financial adviser, expert in insurance.
Nothing but the truth
When it’s time to claim, not being truthful can jeopardise your claim. This includes providing the correct information – nothing more, nothing less than this.
For example, adding non-existing items to a Contents Insurance claim may not just lead to a claim denial, but also put your future insurability at risk (and even result in prosecution).
Once again, having an expert in your corner can make all the difference: Financial advisers are committed to ensuring that your claim is filed correctly and that the payout is assessed quickly.
Do you know what’s covered and what’s not?
Not reading the small print is another point to be aware of. Sure, reading policy documents can feel tedious, but you’re choosing to take out cover for a reason, right? So it makes sense to know the detail. And if navigating the ‘inclusions’ and ‘exclusions’ creates confusion, again, you can always have a chat with a financial adviser.
Have you missed premium payments?
Keeping up with premium payments is crucial. If you fail to pay for a certain amount of time, your Insurance policy could lapse and leave you uncovered and unable to make a claim.
Obviously, oversights can happen, but if you’re finding it hard to meet your premium payments, it’s a good idea to let your Insurance provider or financial adviser know right away: Communication is the best solution for managing your premiums without losing cover.