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5 mistakes Kiwis make when buying insurance
There are a number of common mistakes people make when putting insurance coverage in place. Here’s how to avoid them.
Making sure you have the right insurance cover in place should be at the top of your priority list to provide you with the peace-of-mind to deal with the unforeseen. But what is the ‘right’ cover? Here are some of the most common mistakes that many New Zealanders make when putting insurance cover in place.
1. Not buying insurance, or waiting to buy insurance
The first mistake many New Zealanders make is not buying insurance at all, or putting off getting insurance.
For some people, the process to put insurance cover in place can seem complicated. Others may feel they don’t need insurance, not until they’re older.
The age of an applicant has a big impact on how much cover you can put in place, and how much you need to pay. An unintended consequence of delaying getting insurance may be that the process becomes harder, and the policies costlier. It may even mean you’re not able to get the cover you need. Putting cover in place today can help address this.
2. Under-insuring
Insurance is designed to provide you with certainty – but if you don’t have enough cover, your insurance isn’t fit-for-purpose. It pays to regularly revisit your cover to make sure it stacks up.
One example of a common mistake people make is insuring their house for a sum that was sufficient a few years ago. It won’t allow you to rebuild your home in the current market should you need to. If your policy doesn't give you the coverage you need, it’s not going to fulfil its intended purpose.
Reviewing your cover annually is important.
3. Ignoring the details
When it comes to applying for insurance, providing lots of detail is never a bad idea.
It’s important not to gloss over anything and be truthful with the information you provide.
Some Kiwis who didn’t disclose requested information when applying for insurance found this came back to haunt them at claims time.
When applying for insurance, it’s important to think through your answers to the questions carefully. What may seem like a minor detail to you, might actually be very important for an insurer.
By giving a full account of your circumstances, you can get the cover you need and not run into problems if you need to make a claim.
4. You get what you pay for (unless you don’t pay)
Kiwis love a bargain – but when it comes to insurance, it’s often a case of getting what you pay for. ‘Cheap’ doesn’t always mean ‘bad’, but it’s important to focus on getting the cover that suits your needs rather than the cheapest cover.
When it comes to claims time, which is when you obviously need your cover most, it’s important to have cover from a company that has a good track record of paying claims. It’s also really important to keep up with your premium payments. If you don’t, you may find yourself without the cover you thought you had.
5. Not calling on the experts
Our job as brokers is to help you understand what cover you need, and where to get it from – but many New Zealanders still do it alone when it comes to insurance. Speaking to a broker can ensure the cover you have is comprehensive and meets your changing circumstances.
We can help you understand the ins and outs of different types of covers and policies. Talk over your circumstances with us to make sure you have the cover you need when you need it.
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Published August 2022