Falling premiums, aggressive competition between underwriters and the large number of insurers mean policy prices become cheaper. This is great for our clients but cost savings in the short term may prove costly later.
Ten years ago (March 2001) HIH Insurance collapsed with $5 billion in debts. They had a reputation for being cheap. Many of their policy holders regretted choosing an insurance policy on price alone.
All Companies should analyse the risks their business faces and determine the scope of insurance cover required. As your Insurance Broker, we can help you to do this. While value for money comes into the equation, it shouldn’t do so if it means less protection.
Insurance policies vary from company to company and as your Insurance Broker, we can help you determine how you wish to be covered. It should be remembered however, that in many instances a cheaper premium reflects a narrower scope of cover. As a consequence the premium saving may not represent good value at claim time. For instance, it is not just in the coverage offered but the size of the excesses, the sub-limits applicable and claims service.
Also building a long term relationship with a strong insurer will add value to the Insured’s business. Regularly changing your insurer should not matter in theory, but when negotiating difficult claims, loyalty can be helpful. But maybe your current Insurer has been taken over or re-structured. Perhaps they have lost their high Standard & Poors rating. Perhaps their claims department performed poorly in the recent catastrophic events.
Whatever the reason for making your decision on which Insurer, it should not be just price alone.