In the absence of openness, assume the worst
Russell Hutchinson sings the praises of advisers, and also warns to be wary when insurers don't disclose their documents.
Tuesday, January 15th 2013, 7:57AM
by Russell Hutchinson
If a car manufacturer doesn’t share basic data about their vehicles – like power output, fuel economy, and model features – assume the worst. If it doesn’t say it’s got Bluetooth – it probably hasn’t. If it doesn’t say the tow bar is included – because it’s going to cost extra. So far, so ordinary. We know this stuff.
We have also witnessed unprecedented change over the past 20 years towards more openness. That has been good for clients. But it has often been achieved by advisers.
So if an insurer isn’t happy about sharing policy documents with the public then you can probably assume the worst. In spite of consumer organisations trumpeting the value of going direct, or to the bank, my experience is that the companies that deal with advisers tend to be more open.
Advisers have prised information out of insurers – individual clients can easily be fobbed off by uncooperative companies – but when advisers call there is more at stake, so companies pay more attention. Far more information is offered by insurers today than when I first worked in the industry more than 25 years ago. One of the best things advisers do for clients is help them to learn about products and choose what’s right for them.
The situation which makes me most suspicious is the answer given by so many bank staff “we only give our policy documents to clients”. I am certain that is sometimes due to a lack of training, or occasionally a desire simply to get off the telephone. But in some cases you cannot locate documents on websites at all – and yet most insurers that deal with advisers do make their documents publicly available.
Why?
Because one of the most useful documents to a potential client is the legal description of the actual features they will be buying. In fact countless sales documents usually describe in nice friendly terms a feature or benefit and then wind up by saying something along the lines of ‘but you need to read the actual terms and conditions in the policy document’.
Most consumers don’t, but it is a great comfort to them if the document is supplied – so they could if they wanted to – it shows clearly that the insurer has nothing to hide.
Imagine if the practice of keeping product details secret was universal. Will that new software work on your PC? Is that suit sold in your size? What are the terms of your new home loan? If the answer was “you have to buy it to find out” they’d be laughed out of the market.
Hence the assumption: if the document isn’t available publicly, assume the worst.
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