A few of our property owning clients seemed confused when I advised them that we handle all their claims personally. Their previous suppliers had been settling claims on behalf of the insurance company. This article highlights how not all insurance suppliers are the same, how to check and what to do if you’re shocked to find your supplier is not on your side.

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Who pays the claims?

The insurance company will, ultimately, yet sometimes they will have authorised an agent to manage claims and write cheques on their behalf. This is supposed to speed up the process yet there’s a hidden downside. Agents that pay out less in claims get a bonus from the insurance company. This bonus can amount to hundreds of thousands of pounds. Faced with arranging payment of a few thousand and losing thousands in return is just too tempting for some people. Morals and money are not good friends.

How can you tell it’s possible?

The FSA thinks these practices are OK. They insist providers make it clear in their documents. Look out for small print stating “we act on behalf of the insurer when settling claims”. It may not be clear but it must be on there somewhere. Most people are surprised when the service they expected doesn’t materialise. Yet the clues are always in the T&Cs.

What if your expectation isn’t met?

Policies can be cancelled if they are not a “minimum and deposit” wording. As long as a claim has not occurred, refunds can be obtained. If they refuse to refund their fees in a huff it’s not good news. I’ve heard of some suppliers hiding the fact they collect 48% of the annual investment. It’s never too late to check small print (unless the paperwork gets damaged before you get around to it). The law of the sod is the number one law of insurance.

Wrap up: Not all agents are independent. It’s not always easy to tell at first glance. Look again.

Top tip

A quick flick through the documents that detail your cover will determine exactly whose side an agent is on.

Who to share this with: Property Owners, Facilities Managers, Business owners that rely on their premises to stay in business.