INDEPENDENT NEWS

Insurance market not working for consumers

Published: Mon 24 Jun 2019 08:18 AM
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.”

Next in Business, Science, and Tech

Funding For R&D; In New Zealand – Expert Reaction
By: Science Media Centre
COVID-19: NZ Joins Global Initiative Keeping Ports Open And Freight Moving
By: Maritime New Zealand
National Backs Businesses With $10k JobStart
By: New Zealand National Party
Government Exempts Some Home Improvements From Costly Consents
By: New Zealand Government
The New Zealand Herald Named Newspaper Of The Year, Website Of The Year At Voyager Media Awards
By: New Zealand Media and Entertainment
ASB Takes The Lead Again With New Low Home Loan Interest Rate
By: ASB Bank
The Problems With Testing And Case Statistics For Covid-19
By: Nathan Hoturoa Gray
Fletcher Building to lay off 1000 staff in New Zealand
By: RNZ
Driving prompt payments to small businesses
By: New Zealand Government
On Why We Should Legally Protect The Right To Work From Home
By: Gordon Campbell
Supporting Kiwi businesses to resolve rent disputes
By: New Zealand Government
Understanding 5G Concerns – Expert Q&A;
By: Science Media Centre
Record Monthly Surplus As Imports Dive
By: Statistics New Zealand
Bar reopening night 'much, much quieter'
By: RNZ
New Zealand’s population passes 5 million
By: Statistics New Zealand
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media