The field of insurance is a complex one that is flooded with many myths and misconceptions which can cloud understanding of its importance. If you are trying to navigate this world of financial protection, here are some common misconceptions to help you gain an understanding of insurance and Insurance Brokers.
Common myths about insurance
1. “I can’t afford insurance, it’s a luxury.”
While insurance premiums can be high at times, there are often affordable options available to you that can offer protection within your budget. Not carrying the right insurance is more expensive in the long run, leaving you at a loss after unexpected incidents impact you.
2. “Insurance means I am covered for any event.”
Simply carrying insurance will not mean that you are prepared for every event. It is important to take the time to understand the limitations, exclusions and additional conditions of the policies that you hold and fill any gaps if possible.
3. “Insurance is a waste if a claim is never made.”
While it can seem like a waste, when you pay for insurance you do not only see the benefits if a claim is made but you are also able to enjoy peace of mind and the security that you will be protected should an incident occur.
4. “Insurance premiums are non-negotiable.”
When it comes to insurance premiums, there are a range of ways that these can be negotiated or lowered. A good claims history, strong risk management procedures, regular review of cover and increased policy excesses can all lead to lower premiums.
5. “Claims are always denied.”
The Insurance Council of Australia states that Insurers accept around 96% of claims. If claims are denied, this may be due to policy exclusions, conditions and responsibilities, policy cancellations or failure to renew, non-disclosure, or failure to maintain property.
Data shows that more claims are denied by Direct Insurers as opposed to those arranged by Brokers, as a Broker will advocate for your claims and are responsible for advising on the most appropriate cover to ensure you are fully protected. A case study by AFCA shows that when a complainant whose property was underinsured disputed the claim payout as they did not receive adequate advice, the response was that insurers are not Brokers and the individual was responsible for determining the most appropriate cover for themselves.
6. “Small businesses don’t need insurance.”
While it can seem as though Business Insurance is not an affordable cost for smaller businesses that are yet to make a large profit, it is a necessary cost that can mean the difference between your businesses floating or sinking in the face of misfortune.
7. “Cyber Insurance is only for tech companies.”
Cyber Insurance cover is essential for all businesses who store sensitive information or do any online banking, and can protect in the event of a breach.
Misconceptions about Insurance Brokers
1. “I can find better options on my own.”
Brokers have an in-depth knowledge of the market to assist in navigating the complex landscape and determining the best options for your specific needs.
2. “Brokers only recommend policies that benefit them.”
A Broker is bound by ethical standards and regulations that ensure they prioritise their Clients.
3. “They only have access to certain companies.”
With a wide range of providers, they have access to many companies to offer a range of insurance products.
4. “Insurance Brokers only work with large businesses.”
Brokers serve a diverse clientele, including small businesses and individuals.
5. “A Broker is more expensive than Direct Insurance.”
A Broker is not necessarily more expensive than a Direct Insurer. A Broker is able to secure competitive rates from multiple insurers and offer many ancillary services that Direct Insurers are unable to provide.
6. “Brokers are only needed for complex insurance needs.”
While they are especially valuable for those with complex needs, they are valuable for all. Brokers are also useful for strategies to combine covers, arrange common due dates, or conduct annual reviews.
7. “I can just use an online comparison tool.”
An online comparison tool can be useful, but will not be able to the same considered advice a Broker will.
8. “They don’t help with claims.”
Insurance Brokers guide you through the claims process and offer invaluable support to advocate for your claims, drawing on years of experience and knowledge to push for fast settlement.
Comprehensive insurance cover with Atlantic Insurance
Atlantic Insurance has been protecting clients with business and personal insurance needs since the early 1980s, providing a high level of client service. With a strong relationships with insurers locally and globally, we are able to develop unique insurance products that are tailored to your needs.
Contact us today to receive a quote for your personalised insurance plan.
Any information contained on this page of the website is general advice only and has been prepared without taking into account your objectives, financial situation or needs. Your should consider these, having regard to the appropriateness of this advice and the relevant Product Disclosure Statement (‘PDS’), Target Market Determination (‘TMD’) and Financial Services Guide (‘FSG’), which will be provided following any formal recommendation to you.