Rothbury makes senior hires

Rothbury Insurance Brokers has made a round of senior hires across New Zealand.

Paul Munton, Rothbury’s executive general manager for broking branches, said the appointments would strengthen the business by supporting its branch network, and enhancing operational efficiency.

Brigitte Windsor has been appointed as general manager for national partnerships and facilities. Windsor has more than 30 years’ experience in the insurance industry and was formerly Rothbury’s National Domestic Manager for three years.

Kevin Wellwood returns to Rothbury to become general manager for broking branches. He will work with three new regional managers, Greg Greenwood, Nathan Haywood and Todd Mountfort. Greenwood, Haywood and Mountfort will retain their current branch manager responsibilities in Canterbury, Southland and Rotorua/Pukekohe respectively, Rothbury said.

The new regional managers will be responsible for developing strategies and empowering and mentoring their respective regional teams.

The appointments follow a business review conducted by Rothbury last year which highlighted the need for more capacity to enable brokers and support staff to better service their clients. “We recognised that to maintain an environment where brokers and support staff could continue delivering an outstanding client experience, greater leadership was needed,” said Munton. “This new capacity will bring additional leadership closer to our people and provide more support for our teams who are focused on delivering at the coalface to their clients.” “These individuals are highly regarded and respected within Rothbury and come with a wealth of knowledge. I am incredibly excited to work alongside Brigitte, Kevin, Greg, Nathan, Todd and the rest of the leadership team to further build the Rothbury business for our clients and people,” said Munton.

Insurance broker meth dispute

Simon* owns a small rental property in Christchurch and approached an adviser for help with insurance. The adviser gave Simon several policy options, one of which suited his needs. Simon took out the insurance and tenants moved in.

A year passed with no issues. The adviser then contacted Simon when his policy was due for renewal. After a few weeks, Simon considered his options and renewed his insurance cover.

A few months later, the tenants in Simon’s property moved out and as part of the move-out process, Simon arranged for meth testing to be carried out. The testing showed that a small amount of meth residue had been found in the kitchen. Full decontamination of the kitchen was recommended in the report along with other minor repairs. Dispute

Simon contacted his adviser who assured him that his insurance would cover the cost of the clean-up of the kitchen and any loss of rent while it was carried out. Simon was told no one was to enter the property while the cleanup was taking place.

The adviser then made a claim with the insurer, but it was declined.

The insurer said that the meth levels found in the kitchen were below the threshold to trigger their cover. The insurer told Simon that, before his last renewal, they had increased the meth levels which must be met for a claim to be paid.

Consequently, the loss of rent benefit was also not payable. The insurer said they had told Simon’s adviser of the changes and he should have been made aware.

Simon complained to FSCL that he was not made aware of the changes to his policy by his adviser, either at the time of the changes nor when he renewed his policy. He wanted the adviser to cover the cost of the repairs and the loss of rent also.

The adviser accepted that they could have gone further in making Simon aware of the changes made to his policy and that they could have been quicker to recognise that he wasn’t covered. The adviser offered $1500 as compensation which Simon declined. Review

The Government recently commissioned a report into New Zealand’s attitude to meth and contamination. Following the report, some insurers raised the threshold for the amount of meth contamination required to trigger cover under the policy.

The adviser gave Simon almost 2 months to look over the insurance policy and ask any questions. FSCL considered this sufficient time for Simon to consider the policy and determine whether it served his purposes. Resolution

FSCL considered it unreasonable to expect the adviser to have explicitly pointed out the insurer’s rise in their meth threshold. It decided that the $1500 offered by the adviser was reasonable.

INSIGHTS FOR CONSUMERS

Advisers have a positive ongoing duty to make sure the insured knows and understands the extent of their insurance cover and any changes in their policy. It is not for the adviser to determine whether such a change affects the insured’s needs; the information still needs to be passed on. However, the insured is also responsible for reading and understanding the policy.

Car written off but bills remain

Lucinda* was driving her BMW by a lake when she was caught up in flash floods. Water splashed up into the engine bay and into the computer systems at the rear of the car.

After getting the car towed home, she asked her insurance company for advice on how to get the car fixed. The insurance company sent her a claim form and told her to get the damage assessed. Lucinda took the car to her local BMW dealer who assessed the damage and told her it would cost $500 to repair.

After a couple of weeks, the repair costs to the car had escalated and Lucinda had paid more than $5000 to the car dealership. Only then did she contact the insurance company again to make a claim.

The insurance company assessed the car and determined that the car was a write-off. Dispute

The insurance company agreed to pay out $10,000 to replace the car. They were unwilling however to pay the $5000 she had already paid for the now-defunct repairs on the car.

Lucinda complained to FSCL that the insurance company had not told her that she shouldn’t pay for any repairs before making a claim, nor of the risk the car could be written off. She complained that she was out of pocket $5000 because of this error. Review

The insurance company said that they did not approve any repair work to the vehicle and the repair was started before their involvement. If a claim had been made when the accident first happened, as they had advised, Lucinda would not have been in this situation as the car would have been deemed a write-off from the start.

It was difficult to determine what the insurance company told Lucinda as the person she spoke to made very rough notes after the phone call. The notes could not be relied on to give a full picture of what was discussed and what advice was given. Resolution

FSCL determined that instructions on how to make a claim were clear in the policy documents and on the insurance company’s website. The information clearly stipulated that a claimant must obtain the insurance company’s agreement before they incur any expenses in connection with any claim under the policy.

Even without the full details of the conversation between Lucinda and the insurance company, FSCL considered it likely that the need to make a claim was discussed early on. FSCL found that Lucinda should discontinue her complaint. She agreed to do so.

This meant that Lucinda ended up being out of pocket $5000 because she didn’t make a claim straight away.

INSIGHTS FOR CONSUMERS

Typically, if the value of damage approaches 50% of the value of the vehicle, the insurer may decide to write it off. The insurance company looks at what will cost them more; to repair it or write it off. Also, if repairs are not carried out properly, this could cause more expense in the future. This means that it is very important that a claim form be submitted at the earliest opportunity so that the insurer can appropriately manage the repairs and any associated costs. People may be left out of pocket if they pay for repairs that haven’t already been considered and approved by their insurance company.

Payout brings more pain

In a recent complaint to the IFSO Scheme, Sai* was seriously injured in a car accident, and suffered more pain when his claim payment was $12,000 less than he expected. Sai and his partner were seriously injured in the accident, and his car was a total loss.

Sai had car insurance, with a sum insured of $26,000. The insurer obtained two market valuations and told Sai they would pay the market value of $18,000.

Sai made a complaint, because he believed he had “Agreed Value” cover and the insurer had to pay him $26,000.

Agreed Value is the amount you and your insurance company agree to insure your car for.

“’Agreed Value’ means you nominate what your car is worth if it is a total write-off,” says Karen. “Many owners choose it, even though it can have higher premiums than ‘Sum Insured’.

“However, ‘Agreed Value’ doesn’t mean it is an amount that never changes,” continues Karen. “The agreed value for your car is assessed annually at your policy renewal and it takes depreciation into account. In this case, Sai had taken out his vehicle insurance some years previously, so depreciation was a factor in the amount offered.”

Sai had arranged a “Sum Insured” policy. “Sum Insured” means the insurer pays either the value the vehicle has been insured for, or the market value of the vehicle at the time of the accident, whichever is less.

Sai complained to the IFSO Scheme saying he had always arranged “Agreed Value” insurance for his vehicles, and he believed the insurer knew that was what he thought he was doing, because of a comment he made in a telephone call about the “agreed amount”.

The IFSO Scheme investigated and found there was no misrepresentation made to Sai. Furthermore, he could not show he had suffered any detriment, because the insurer had said that, if Sai had “Agreed Value” cover, the vehicle would have been depreciated each year and the “Agreed Value” would have been $16,650 at the time of the accident.

The IFSO Scheme found no evidence of a breach of the duty of good faith and found the insurer had paid the claim in accordance with the terms and conditions of the policy.

“All too often, not understanding insurance terms means consumers are going to be disappointed with the outcome,” says Karen.

“I’m concerned that misunderstanding hits people hard when stress levels are already extremely high. Checking your policy only takes a few minutes and could save you a lot of grief in the future.”

Steak cooked in a toaster sparks disaster

The sequence of disastrous events began innocently enough when Mr H* had a craving for steak and chips. For reasons unknown, he decided to cook his steak in a toaster. Having inserted the steak into his toaster and started the toasting process, he had a further strong desire for hot chips. Leaving the toaster unattended, he left the house for his local fish and chip shop.

The ensuing fire left the house severely damaged.

Fortunately, the couple’s home was insured. However, they were in for further stress when they made their claim. Despite their insurer accepting their claim and offering $418,000 - the maximum amount that could be paid under the couple’s policy, the couple felt the sum was not sufficient to replace the house. Contacting the Insurance & Financial Services Ombudsman (IFSO), they argued that the insurer should pay them an additional $200,000, a further sum that they claimed was required to rebuild the house. the insurer was not clear there had been a previous change in policy cover, from replacement cost cover to total sum insured cover.

Karen Stevens, IFSO, said the fire was a tragedy for the couple, but not understanding the annual insurance renewal process or the cost to rebuild their home, added further avoidable suffering.

“Every year, everyone with insurance policies receives a renewal offer that can amend or change the policy that they originally signed.

“I can’t stress highly enough the need to read each renewal letter carefully. Most insurers now offer total sum insurance, meaning your house is insured for a set price. If you don’t do your homework and insure your house for too low a sum insured, you could find yourself unable to rebuild your home. The sum insured should be what it would cost to rebuild, not what it’s worth on the market.”

“Your acceptance of the new terms is often the next payment of your premium.”

Stevens says that for those who are unsure of their home’s value, there are online calculators to assist, but they are estimated building costs only.

“Online calculators aren’t a substitute for an insurance valuation provided by a registered valuer or home valuation provided by a building expert. We recommend you get the experts in if you’re unsure.”

IFSO did not uphold the couple’s complaint, saying that the insurer had paid the policy’s maximum entitlement and that the couple had been adequately informed of the change to their policy.

Stevens believes that, in this case, the original fire event was preventable, and one that must have wreaked havoc with the couple’s lives.

“Cooking steak in a toaster is literally a recipe for disaster. To have then left the house and toaster unattended for the sake of hot chips must be a constant source of regret. Never, never leave cooking unattended, even if you think you’ll just be a minute – and please, use your appliances for the purpose for which they designed. Toasters are for toast.” www.covernote.co.nz