You either pay now or pay later!

The floods in Northern New South Wales at the end of June 2005 have had an interesting impact upon business and homes alike. I spent most of my Wednesday night and Thursday taking calls from clients who were concerned about their homes and businesses as the water was rising extremely fast.

On Thursday morning I went to working ringing my staff along the way advising them not to attempt to come to work as I had to walk knee deep through water through the Byron Bay Industrial Estate to get to our building. After opening the office and taking some calls a client who lives on the same canal in North Ocean Shores rang me and he was starting to get extremely worried. His opening question was “Hi Mat, do I have flood cover?” I replied by saying “Denis, when we put your insurance program together we assessed the risks that you were exposed to and the fact that you live on the canal if it rains hard and long enough you would want cover for flood.”

Denis may have paid slightly more at the time but the old adage of “you get what you pay for” rains true. If I had of just provided Denis with the cheapest policy in the market and mind you that would have saved him over $100 he would not have had his claim paid for the flood damage. Denis’ claim was handled without issue or argument with the insurer Australian Unity as there was always going to be cover so the insurer simply started the process of making payment and rectifying any damage. The benefit of dealing with an insurance broker over dealing directly with an insurer is simply that we will look at the risks that are imposed upon you and your property and then find the right insurer and more importantly the right product because sometimes the insurer has several products that will do the right job. At the end of the day economics will always come into it as you may not want to pay the amount that the insurer wants for that level of cover…….BUT AT LEAST YOU ARE EDUCATED AND KNOW ABOUT IT rather than it come a surprise when you do want to lodge a claim.

Another of our clients I am sure is more than happy with the recommendation of flood cover provided by Australian Unity as her claim was estimated to be nearly $100,000 of damage after only owning the house for less than 1 year.

I can say that we did not have one of our client’s who did not get their claim paid. We did have some difficulty with a couple of claims where the insurer stated that the damage to the business was caused solely by the flood and not the waters that pooled on Wilfred Street in Billinudgel. We spent considerable time and effort discussing the claim and the hydrologists report with the insurer but eventually got them to change their decision. This was based on the fact that there was not clear evidence that the pooling did not attribute to the damage and it could not be ascertained that the actually “flood” waters or the “rainwater runoff” was the actual cause.

It is essential that when you are putting your business insurance together that you have a clear understanding of what risks you want to insure against as well as what other external influences that may be from where your business is located. Sometimes it not what you are covered for that you should be looking at the hardest but what is not covered. You should take the time to look at the exclusions in the contract as this is what will affect your business the most. Don’t be the most disappointed person with an insurance policy when it comes time to claim. Seek assistance from your broker as that is what they are there for. If they don’t have time to explain the basis of the cover they are putting in place……..it’s simple……go elsewhere!

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