Consumers and their cavalier attitude towards insurance

by BriefYourMarket | Aug 8, 2019 | Insurance | 0 comments

Black and white image of professional man with insurance icons floating between his hands with 'Do they actually care if their policies fully cover them?' written over it

When it comes to insurance, having the wrong cover can be as much of a risk as having no cover at all.

Yet it’s been reported by Insurance Business Magazine that a growing number of Brits are taking out policies without knowing – or caring – whether they would even be successful in the event of making a claim.

As it turns out, over half of UK policyholders are knowingly underinsured, with “violations ranging from switching jobs – and failing to notify the provider – to not locking doors when leaving the house.”

So, where has this cavalier attitude come from, and what can brokers do to combat it?

Brits and their personal policies

The UK’s total household value has surpassed the £1 trillion mark, with an average value of £35,000 per house. And yet, more than one in four do not have contents insurance – leaving £266 billion at risk.

One cause for this is that the insurance industry has been devalued in the eyes of consumers.

Comparison sites provide your customers with the ability to obtain and compare quotes in a matter of minutes, but when they’re skewing their answers to receive a more favourable figure, and those online self-service channels aren’t pushing for the full picture, is it any surprise that so many are now so heavily underinsured?

In fact, 50% will make “rough calculations” when taking out a policy, with one in ten opting for a blind guess as to the value of their possessions.

Aware that their behaviour voids their cover 50% 50%
Leave their windows open 34% 34%
Don’t lock up when they’re out 21% 21%
Won’t use their burglar alarm 17% 17%

Commercial and auto policies

SMEs are particularly at risk of being underinsured, as reports show they tend to go for policies based on ‘hunches’, and therefore miscalculate how long it would really take for their business’ revenue to return to a pre-loss level.

Following the well-publicised cyber crime scandals of 2017, you might assume that there wouldn’t be a single company in the UK left without cover, yet six out of ten (62%) have recently reported that their premiums are based on averages and other unknown factors, rather than an accurate analysis of their own needs.

So, should the worst happen – and they fall victim to a cyber-attack – a significant proportion would find themselves unable to recover from the financial fallout and reputational damages.

Another policy that’s often overlooked is auto insurance.

Despite the fact that half of UK drivers are aware that these actions will invalidate their policy, 31% will let other people drive their vehicle, 17% will travel with unrestrained pets, and 13% will not inform their provider of a change in employment.

How we can help

You need to encourage your prospects to seek out your professional expertise rather than relying on their own limited understanding.

We have the marketing content and tools that will raise your brand profile and engage your audiences’ attention.

Get in touch on 0344 800 84 24 to find out how we can benefit your brokerage.

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