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    Throughout 2021, there were more than 90,000 additional insurance policies taken out in New Zealand, most likely triggered by the global pandemic.

    More people being protected is always a great thing but, alongside this positive new trend, there seems to be a common misconception that insurance providers are being tight on pay-outs, denying claims and leaving people high and dry.

    In reality, insurance companies in New Zealand have paid out a majority of claims throughout the pandemic.

    Tim Grafton, the CEO of the Insurance Council, says, “Very, very few claims are declined. We do urge people to be familiar with their policies as they are contracts, and if they have any doubts or questions, they should have them clarified with their insurer.”

    The real insurance pitfalls

    With an expert insurance broker on your side and the right insurance products, the chance of a claim being denied when you need it the most is slim. Usually, the reason for this happening is having an insurance policy that doesn’t serve you as well as it should.

    Here are the top three mistakes we’ve seen over the years and how you can avoid them:

    1. Being underinsured

    This includes not having any insurance at all or not having enough. The problems of no insurance are evident, but many insurance holders only find out about the downside of underinsuring after trying to make a claim. Being underinsured can lead to gaps or exclusions in your coverage and poses the risk of insufficient compensation in the case of a loss, illness or death. Without the necessary time and expertise to appraise their needs in detail, people often pick a coverage amount without properly calculating it.

    How to avoid being underinsured:

    With insurance, you get what you pay for, so don’t get all the add-ons if you don’t need them. If you’re trying to save money on weekly premium costs, you risk not having the best protection for you and your family when you need it. Ask an expert to comb through the details with you to compare policies, calculate your needs properly and make sure you’re getting the most value (and cover) for your money.

    2. Premiums aren’t proportionate to your income

    This can be a common problem with income and life insurance, especially if one spouse is earning more than the other. You want to make sure that if either you or your partner lose income or pass away, you’re protected for the amount each person brings in, so you can cover all your expenses.

    How to calculate the right premiums:

    Most insurers say that a good compensation amount for life insurance is around 15 to twenty times the amount of your annual salary. Life insurance should be enough to cover your mortgage, pay off any debt, schooling and university for your children, and basic lifestyle costs.

    3. Your policy isn’t suitable anymore

    If you purchased your insurance a while ago, your situation may look very different now. It’s important to review your policy annually, or at least as your circumstances change, so you’ve got the best fit for you and your family. An annual review will ensure you don’t fall into the trap of paying too much for insurance that isn’t actually suitable.

    Check on your policy when:

    – You have a new addition to your family
    – You buy a new home
    – Your income and/or lifestyle change
    – It’s been a few years since the last review

    At Global Finance, our insurance experts run clients through a list of relevant questions to make sure they’re not overpaying or under-covered. Insurance companies often add new features, so as your life changes new policies become available. We keep on top of these changes and maintain extensive knowledge of the best practices to apply and submit claims.

    We’ve been saving insurance-induced headaches for over 23 years

    Insurance can be complex. Going through a professional insurance advisor can save you a lot of headaches, money and risk. It always pays to make sure you’re getting the best deal possible and you’re supported throughout the lifetime of your policy – not just at the start.

    For over 23 years, our insurance advisors have expertly made sure clients have the best-fit insurance products, and we’re proud that over 90% of our claims are approved.

    If it’s time for an insurance review (or a new policy), call the team at Global Finance today.

    **Underwriting criteria and insurer terms T’s and C’s apply