Challenging insurance

Ruapehu Bulletin, Volume 11, Issue 499, 17 August 1993, Page 10

Challenging insurance

by

Ani

:Waaka

Most of us know that insurance is a necessary way to protect our belongings, whether it be motor vehicle, house or contents insurance. But it is surprising to find the number of people who are not actually sure what

their policies cover, or what they are entitled to in the event of making a claim under the policy. If you are in the position where you disagree with your insurance company's assessment of the damages to, or value of, your property and you do not know what your policy actually entitles you to, you will have difficulty in effectively enforcing your rights under that policy. Before any insurance company will honour a claim on a policy, they will make a valuation of the monetary loss to the consumer before deciding on what action to take. This valuation may take the form of an assessor coming to see the damage to property to assess loss or making a judgement according to market prices on the value of lost/damaged goods. The assessor will then make a report to the insurance company on the loss suffered which enables the company to decide on how best to honour the claim. So what do you do if you think that the insurance company has undervalued your loss and is not paying out what you would have expected? Check your policy. Remember that a full replacement policy should do just that, an indemnity policy will give you the market value of the goods and a fixed sum policy will give you the sum specified in the policy. If your house burns to the ground and the insurance company only offers you compensation worth half of your home's current value, it may be because your insurance policy is for a 'fixed sum' only and the company is not obliged to pay out any more than the sum stated in the policy. Or it may be that the assessor has made an incorrect assessment of what the house was worth. To know what you are entitled to, you must be familiar with what your policy will cover. Then, ask the company how they came to the assessment. Ensure that there have been no errors about the age, type and/or condition of the goods damaged or lost. As you will be aware, most insurance policies carry an 'excess'. This is an amount that the insured person has to pay (or have deducted from

the pay-out) before the insurance company will settle the claim. If it does appear that the insurance company is trying to settle the claim by offering you less than your policy offers, then you have a dispute on your hands. You can get an independent valuation on the goods (if they have been lost or stolen, then the valuation will have to be on the accurate description of them) and approach the company with it, asking them to explain any difference in the amounts. If the company cannot adequately explain the difference then you should dispute the matter in the Disputes Tribunal. You should not accept the company 's offer of settlement if you wish to dispute it as most companies will not release any settlement until the consumer has signed an agreement that they will not dispute the claim any further.