Almost nine out of ten (89 per cent) of insurance brokers believe insurers are becoming stricter on paying claims, according to research from the British Insurance Brokers’ Association (BIBA).
The main reasons cited by insurance brokers are due to the economic climate (77 per cent ) and fraud (56 per cent).
The research found that 64 per cent of brokers said they have had to fight harder to get claims paid and 72 per cent have overturned a claim rejection by an insurer in the last year.
Nearly 70 per cent have secured an increased claim payment for a client, with 43 per cent of brokers saying that the average percentage uplift on claims that they regularly negotiate on behalf of clients is between 11 per cent and 20 per cent.
Eric Galbraith, BIBA chief executive, said: “The economic climate has led to stricter policy interpretation and anti-fraud systems by insurers meaning that customers are having claims reviewed in more detail. The research demonstrates the importance of having a broker to fight your corner and represent you at claim time.”
Graeme Trudgill, BIBA’s head of corporate affairs, added: “You only find out the value of your policy at claim time. Brokers not only support you in a claim but can help ensure that you purchase appropriate cover and make relevant disclosures to minimise the risk of claims being rejected.”
In the research, brokers highlighted examples of a claim worth £35,000 for a stolen car which was initially rejected but where the brokers’ knowledge and involvement ensured the claim was paid in full, and a commercial theft of stock claim where the claim payment increased by 40 per cent following the broker’s involvement.
BIBA represents the interests of insurance brokers, intermediaries and their customers. It helps more than 400,000 people a year to access insurance protection through it’s Find a Broker service, both online and via the telephone.
Case study
An armed forces family were posted overseas. Whilst abroad they put their belongings into storage. When they returned, their belongings had been damaged so they took steps to claim from the insurance policy of the storage company.
The claim was unsuccessful due to policy wording interpretation from the insurers and the family was offered £4,000, although their belongings were worth significantly more.
The family made contact with the armed forces trade press who sought advice from insurance brokers. An insurance broker became involved and helped the family navigate the policy wording and evidence that their claim was valid. The broker’s involvement and input resulted in the claim being settled for £12,000.
