Monday 17 March 2014

Insurance industry 'drops ball on sum insured'

The insurance industry is overseeing a ticking time bomb with its move to sum insured leaving thousands of New Zealanders underinsured, which shows the need for a locally-owned company to raise standards, Labour Leader David Cunliffe says.

"The Insurance Ombudsman has today made it clear that in many cases insurance companies are not giving their customers an accurate idea of how much to insure their home for.

"The information sent to customers is too generic and, as the Ombudsman points out, is just plain wrong in some cases.

"Around 600,000 families could be underinsured. If their house burnt down they could be hundreds of thousands of dollars out of pocket.

"If there was another serious disaster families wouldn’t have the money to rebuild. At the moment sum insured is a ticking time bomb.

"The industry has insisted on moving to sum insured because it took a big hit after the Canterbury earthquakes. But it isn’t providing the information Kiwis need to make such a big decision.

"That’s not good enough. The industry needs to lift its game. That’s why Labour will introduce KiwiAssure - a KiwiBank-style insurance company that will raise standards and look after Kiwis first.

"Labour will closely monitor developments in the insurance industry, especially in Christchurch," David Cunliffe says.

Source Fuseworks

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