When it comes to insurance, veteran brokers always advise customers to look more at what risks are not covered – or, worse still, might not be covered – than what the policy states is covered.
Insurers blithely pitch themselves as warm, cuddly and caring in their marketing and advertising. But the small print is where the real story is, and that can be so confusing that, sometimes, even the insurer’s staff struggle to understand it, never mind the hapless consumer.
That was the case when Zurich changed the wording of its home insurance policies earlier this year. The insurer, which is the third largest player in the Irish property insurance market, insisted – and still does – that additional wording it added to its definition of flood and then to exclusions under an “escape of water” clause was designed merely to clarify “ambiguous” wording.
[ Zurich letter wrongly told customer they were not insured for flood damageOpens in new window ]
Brokers to whom The Irish Times spoke thought that it fundamentally altered cover for thousands of Zurich customers.
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The change in wording is “significant” one told us “and to say no policyholder will be affected is not true”.
Even Zurich’s staff seemed confused, informing at least one customer that it did mean his cover had been fundamentally changed. They doubled down by saying they had checked this position with the insurer’s product team, who presumably would be fully across any change in wording of policies, and the claims department, which would ultimately decide whether cover would be available under the updated wording.
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The company has yet to explain how, in light of that communication, any customer could know their cover had not, in fact, changed.
More broadly, brokers are decidedly cynical about “upgrades” to insurance policies. “Ninety-nine per cent of the time, these updates or policy reviews end up reducing cover, removing cover or restricting cover more tightly,” said one veteran operator.
“They all follow each other in a race to the bottom in terms of cover,” said another, noting that some insurers were now offering derisory levels of financial protection for sometimes catastrophic damage.
If nothing else, consumers would be well advised to ignore the endlessly reassuring and meaningless advertisements from companies in the sector and focus on any changes in policy wording at renewal time, rather than carelessly clicking the “renew now” button.
Time spent then could save them potentially tens of thousands of euro down the line.
