The Matter of Cost vs. Advice

In my day-to-day work as a Commercial Insurance Broker I get the unenviable pleasure of hearing a raft of marketing and sales white noise about what’s important.

One of the favourite chestnuts of various sources of this noise is that we’re all here to pay claims when you need them. Suncorp has marketed very successfully in this vein after the 2011 floods.

The head scratcher for me is that if the payment of claims is so important to everyone (and I agree it should be), why is it that 9 out of 10 times when I meet with a new referral, all they ask about is cost?

..according to ASIC data, up to 60% of homes and 80% of business are either underinsured or uninsured..

What I do know is that according to ASIC data, up to 60% of homes and 80% of businesses are either underinsured or uninsured. This means that the majority of people are either dangerously misinformed – or – they have deliberately underinsured to save money.

Recently I have the opportunity to meet with a new client that we had taken on, to review his portfolio – a pretty standard process for a decent broker. The client was concerned about his ability to continue to fund the cover.

During the course of the discussion, and firing a range of questions at the client we pretty quickly discovered that when his existing cover was established, his business had not been correctly defined. This lead to the establishment of cover that wasn’t exactly what he needed, and he was subject to more expensive underwriting terms.

We were able to apply a more appropriate insurance contract, get the client re-underwritten and a premium that was cheaper by about 35%. Ironically, getting the right advice also achieved a significant premium saving, and potentially a six or seven figure benefit in the event he sustained a serious claim event.

The point here is that getting good advice isn’t necessarily expensive. If you get the feeling that your adviser is only talking about cost, or if they don’t really understand your business, then please email us on tbib@tbib.com.au or call us on 07 3252 5254 and talk to one of our brokers.