Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Insurance market not working for consumers

Consumers are paying more than ever for insurance but they’re not getting a fair deal, Consumer NZ’s latest report on the industry shows.

Consumer NZ chief executive Sue Chetwin said its survey research found significant problems in the insurance market, including a high level of complaints and low levels of trust.

“Just 13 percent of consumers were confident they could trust insurers to give them good advice. Many were unsure about the cover provided by their insurance policy and what they were getting for their money. Only 18 percent felt they fully understood the terms of their policies,” she said.

The survey also found one in four had experienced a problem with their insurer. The top complaint? Having a claim unreasonably declined.

Ms Chetwin said insurers had wide-ranging rights to decline a claim if they decided a customer hadn’t told them something they considered material, regardless of whether the customer knew they needed to disclose this information.

“In other countries, consumer protection laws prevent insurers from unreasonably refusing a claim in cases of innocent or accidental non-disclosure. But that’s yet to happen here, which means Kiwis are more likely to have claims declined,” she said.

Consumer NZ’s research also found those who bought cover through an insurance adviser or broker were more likely to feel they were getting a bad deal. They were significantly less likely to be satisfied with the service they got compared with those who bought direct from an insurance company.

Ms Chetwin said this difference was most evident among consumers who’d bought life insurance.

Just 28 percent of those who got their life insurance from a broker were happy with the service provided, compared with 44 percent who bought direct from an insurance company.

“Life insurance brokers get paid on commission, which can be as high as 200 percent of the premium. Commission-based selling comes with a huge risk the broker will put their earnings ahead of what’s right for their customer. The results of our research suggest selling insurance this way is leading to poorer outcomes for consumers.”

Consumer NZ is campaigning for changes to insurance law to improve protection for consumers.

Proposals to change the law have been released by the Ministry of Business, Innovation and Employment. The deadline for public submissions on the proposals is 28 June.

Ms Chetwin encouraged consumers to have their say. “If you want to get involved, we’ve put up a template submission on consumer.org.nz to help you.”

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Marine And Freshwater Reports: EDS Calls For Urgent Action On Marine Management

“There are some big issues to address. These include many marine species and habitats that are in serious trouble. Of the sample investigated, the report finds that 22% of marine mammals, 90% of seabirds and 80% of shorebirds are threatened with or actually at risk of extinction..." More>>

ALSO:

$7.5 Billion Surplus: Government Accounts "Show Strong Economy"

“The surplus and low levels of debt show the economy is in good shape. This allows the Government to spend more on infrastructure and make record investments in health and education,” Grant Robertson says. More>>

ALSO:

New OIO Application Trumps Judicial Review: OceanaGold Cleared To Buy Land For Waihi Tailings Expansion

In a surprise turnaround, the government has given OceanaGold a greenlight to buy land to expand its Waihi mine after the application was previously turned down by Land Information Minister Eugenie Sage. More>>

ALSO:

Christchurch Rebuild: Fletcher Sued For $7.5m Over Justice Precinct

Fletcher Building is being sued for $7.5 million by utilities contractor Electrix, one of the subcontractors on the Christchurch Justice and Emergency Services Precinct. More>>

Three New Drugs: PHARMAC Signs Bundle Deal For More Cancer Medicines

420 New Zealanders with lung cancer, breast cancer, multiple sclerosis and respiratory disease will benefit each year from a bundle deal PHARMAC has finalised with a medicine supplier. More>>

ALSO: