Stories to illustrate why you need an insurance broker

Jul 2, 2019 | Why you need a broker

Insurance brokers do a fine job of reading fine print.

Direct insuring is almost always a bad idea. There are ample reasons why a mediator is needed between a client and an insurer. One such reason is that insurance brokers are skilled in fine-combing the fine print on clients’ behalf – many of whom never even take the time to read these “unimportant” nitty gritties. Brokers will warn their clients against onerous requirements that often lead to non-compliance and consequently non-payment.

Here are a couple of accounts of direct clients who ended up not getting the compensation they bargained on in a time of need.

The story of Malan family and why they hate the neighbours’ dog, but love their new broker…

Mrs Malan was heading to her children’s school for drop-off one morning. With all three kids strapped onto the back seat, lunch boxes on their laps, she rushed out of the driveway – late as always. The family lived in an estate and despised their neighbours’ mischievous dog that was always running loose. On this particular morning, little Snoop saw it fit to chase a bird across the road as Mrs Malan was hastily making her way to the exit gate. She tried to dodge him, but in the process swung out too wide, resulting in a collision with the neighbours’ stationary vehicle. Needless to say, the family was late for school. But this was not the worst of their problems – their car was damaged! Mr Malan was not so pleased with either the dog or his wife, but in the end his greatest frustration turned out to be with their insurer that rejected his claim!

The non-payment was based on the fact that Mrs Malan was driving on a non-public road (inside the residential estate) and therefore did not enjoy cover under the policy for the accident. In support of its rejection, the insurer relied on a provision in the policy that read:

“No benefits shall apply whilst the vehicle is being driven where there is no formally registered road.”

A broker would have noted this and either warned the client or – even better – never would have dealt with an insurer that included such unreasonable specifications in their contracts.

The family went on to hate the neighbours’ dog, but they did get a broker after this incident and never had non-payment issues again!

The story of Rosemary who lost her laptop and her temper and then gained a broker

Rosemary is a successful and savvy business woman in her thirties. Because of her skillfulness, she thought she would be able to manage direct insuring. One unfortunate day on a much-needed holiday, her laptop was stolen. She immediately reported the incident to the police, but decided to enjoy her last few days on leave and deal with the insurance company when she would get back to office. However, the following week – on top of handling the chaos caused by the lost data that had been stored on her laptop – her insurer repudiated her claim! Apparently, their policy required for claims to be lodged within 24 hours. Rosemary was furious, but there it was: the clause in black on white on a contact that she had signed herself. There was nothing she could do, except to plan better for the future and get an insurance broker – something she did immediately and had never regretted for a day since!

There are many similar stories of people like these who had to learn the hard way.

Do not be one of the victims for whom Ts and Cs end up to stand for “Tears and Calamity”. Use a broker!

Status Insurance Brokers are skilled to help you read the fine print and protect you against non-compliance.

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