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Advocates let advisers get on with business of advising: Kelly

A company that offers to sort out contentious insurance claims says it can provide a boost of up to 8% to a financial adviser’s bottom line.

Wednesday, April 22nd 2015, 2:05PM 1 Comment

by Susan Edmunds

Insurance Advocates has been operating for the past three months and has 25 complaints open on its books. Five have so far been completed.

Senior advocate Nigel Kelly said the company would assess a claim and if there was merit, go in to bat to have it resolved.

It would charge 20% of any payment successfully negotiated from an insurer.

He said it was common for people not to have the patience to pursue an argument over a claim, or to be in a situation where they did not have the time to devote to it.

Some claims would still be at the beginning of the process, he said. Others would be at the point where they were about to be taken to an external disputes resolution scheme, while others were those that had not be resolved satisfactorily by an EDR.

“It’s fair to say there’s been enormous interest.”

Some of the interest had come from the insurance adviser community, he said. Kelly said his firm was able to pick up issues with a claim that had expanded beyond an adviser’s skillset.

“You’d think advisers would know all about claims time bu as soon as it hits the legal arena for some it’s beyond their capability. Advisers are humans and sometimes if something is too hard it gets put on the backburner.”

Advisers who were paid fully in commission could find there was no benefit to them in devoting a lot of time to working on a claim.

With the client’s consent, passing it to Insurance Advocates was a way to free them up to continue to work on areas that generated income. “It can add up to 8% to their bottom line.”

Insurance and Savings Ombudsman Karen Stevens said she had dealt with more consumer advocates over recent years, primarily due to the Christchurch earthquakes.

“Generally we discourage any representation that could add an unnecessary cost for the consumer. From time to time, some representatives can really assist to achieve a better result for the consumer, depending on the circumstances. However, I have real concerns about representatives who charge a ‘success fee’, or take a percentage, when their involvement does not improve the customer’s overall position.”

She said free assistance was available from groups such as Citizens Advice Bureaux and Community Law Centres.

Tags: financial advisers health insurance Life insurance

« Make disclosure automatic: WhyteHealth insurance claims hit $1 billion »

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Comments from our readers

On 24 April 2015 at 12:01 pm RiskAdviser said:
Great service from IA, I've used them to good effect when the need for good legal representation is required. This is where, as adviser's, it's not something we're qualified to argue competently on some very pointed point of law to successfully get a claim paid. I'd be interested to hear Karen's comments after she puts client cases to CAB and community law where insurance matters and contracts aren't standard fare. It might be surprising, but I'd like to understand the success rate of these cases when you are typically talking difficult cases. Some I've seen have had multiple answers form the legal profession, the lawyers with a specific insurance background typically have it right and get it right for the client. this is where IA has been very helpful.

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