‘Just Wondering - How Well Do You Understand Your Insurance?’
This Money Week the Insurance Council of New Zealand - Te Kāhui Inihua o Aotearoa - is encouraging New Zealanders to make one day during the week their ‘Insurance Day’ to check their insurance and that the cover it provides meets their needs.
ICNZ says the activity is driven by research it commissioned which shows a disturbing lack of understanding of insurance by New Zealanders.
"Only 54% of those that completed our survey declared to know what their insurance covers them for," says Tim Grafton, CE ICNZ. "Sadly, we expect that this will actually be much lower, with many admitting to not having any interest in reading their policy documents."
ICNZ’s insights are backed up by research out of Australia which shows that people have an apathy for reading their policies, spend too little time on it, and have an over-confidence in their understanding.
"We understand that insurance policies are a long read with no immediate pay-off for your time. However, it’s an important part of your financial resilience to help get you back on your feet when the unexpected happens," says Mr Grafton. "That’s why we’re calling on Kiwis to make one day this week their ‘Insurance Day’, making time to check their insurance is fit-for-purpose and that it will meet their needs if they ever need to claim.
"If you are unsure of anything in your policy or what you’re covered for, ask your insurer."
During the week ICNZ will run a quiz which will focus on the three most commonly misunderstood parts of insurance: sum insured, excesses and the difference between sudden and gradual damage.
Mr Grafton says the ICNZ Money Week quiz highlights the ways these three insurance terms could be interpreted. "I hope those that don’t get the right answer will seek more information that may ultimately help them address potential gaps in their insurance."
To encourage uptake in the quiz participants can choose to go in the draw to win a Prezzy Card worth $200.
ICNZ’s activity is supported by the Insurance & Financial Services Ombudsman (IFSO) which included the three areas as regular complaint areas in its Annual Report 2020.
Commenting on this Karen Stevens, Insurance and Financial Services Ombudsman Scheme, says, "Through our work at the IFSO Scheme, we get to see a lot of cases where consumers are disappointed because their insurance doesn’t respond the way they thought it would. We recommend that you look at what you’ve got every year, when the renewal documents are sent. Has anything happened in the last year that you need to tell your insurer about? Taking note of what your policy says you must do, before you need to claim, can mean the difference between a successful claim or a declined claim."
Mr Grafton concludes that, "Insurance is not a ‘set and forget’ product. It renews annually and can be updated at any time during the year. We encourage all Kiwis to take a day this Money Week to read their policy, check their cover, and to find out more if they have any questions."
Resources on what to think about and check when reviewing insurance are available on ICNZ’s Insurance Health Check section of its website. Here you will also find information on what to do to calculate your Sum Insured, what excesses are, and the difference between sudden and gradual damage.