Britain's biggest insurance broker body BIBA says it members have had to fight harder than ever to get recalcitrant insurers to pay legitimate claims because of the recession. Insurers try to wheedle out of paying or offer far too little at the outset. It's rip-off Britain.

The insurers claim they now use stricter policy interpretations and have anti fraud-systems in place. I say that's cobblers. They sell policies as if everything is covered then remove cover without telling the insured - just because they charge too little. Instead of cutting cover they should charge the correct price.

Survey

The British Insurance Brokers' Association (BIBA) found 67% of broker respondents said that they had to get tough with insurers on behalf of customers to get claims paid. Some 93% regularly negotiate up to a 20% uplift on claims settlements.

This is worse than last year. Then, 58% of brokers had to fight insurers tooth and nail for a decent payout and 87% secured a 20% better deal for their client.

Last year BIBA said 91% won a better deal of some sort and 94% overturned a claim rejection, often regularly.

This year it provided examples of claims brokers had won for their client:
  • Water damage to a kitchen. Claim was originally put forward as settlement at £4,500, after discussing the claim and obtaining more information, it was eventually settled at £20,000
  • Flood damage claim, initial offer approximately £9,500, final payment £17,500
  • A broker increased a business claim for material damage and business interruption from £170,000 to £400,000 following a fire.

Use a broker

Eric Galbraith, BIBA chief executive, said: "This is strong evidence to demonstrate the value of the broker and we plan to use this in every way that we can to promote brokers to wider world."

He's preaching to the converted with me. But it is more complicated than that. Not all brokers are the same. There are specialists. And if you have specialist needs, shop around for the right broker – or brokers – for you or your business.

The broker that specialises in one business sector may not be an expert in another. And commercial lines brokers will often have little to do with home insurance and other personal lines. A specialist at classic car cover might not be the best for your travel policy. And so on.

Underwriters

And you need a broker that talks direct to underwriters and can vary the policy wording and negotiate what is, and is not, covered – not just one that compares prices. When buying insurance, it is important to get the cover you need right and only then start looking at prices.

For example, I have just had to switch motorbike brokers from the country's biggest, Carole Nash, to a non-standard specialist, Bikesure. It turned out luggage not permanently attached to the bike was no longer covered under any policy Carole Nash could source.

Bikesure found an obscure, specialist insurer that would cover the luggage switching between my three bikes. It also agreed to my request that the lower value bikes could, sometimes, be left outside the garage overnight. I ended up with a more comprehensive policy with greater flexibility and fewer restrictions.

So, use a broker – just make sure it is the right one for you.

Links (new windows)

BIBA
Carole Nash
Bikesure