Intouch Autumn 2015 - The price is right – but is the cover?
Imagine you needed to buy a waterproof coat. You head to a shop, and spy two almost identical choices. At first glance, it seems the only difference is the price.
They're both raincoats, you reason, so there can't be much difference and you opt for the cheaper one. However, a few days later you encounter a heavy downpour, and only then do you discover that the jacket isn't fit for purpose. It's only after going back to the shop to seek a replacement, that you take a closer look at the more expensive coat and notice it has an extra protective layer.
Now what if the same mistake was made when purchasing legal indemnity insurance? If two similar-looking policies are identified, but one has a lower premium, the temptation may be to go for the cheaper policy. Unlike with a coat though, if a policy is put to the test and inadequacies are discovered, a replacement cannot be bought - and the consequences could be disastrous.
The devil is in the detail
The question of putting the price ahead of the cover has come to the fore recently in the legal indemnity market, with a number of insurers offering so-called 'deals' and price promotions.
When choosing a policy for your client, it is absolutely vital to make sure that it represents value for money, of course by being competitively priced, but without compromising on the level of cover provided. Outwardly, two policies may look similar, but if you take a look at the respective policy wordings, often enough you'll uncover some fundamental differences.
Value for money
At Countrywide, while we cannot claim to always be the cheapest provider around, with our comprehensive, market-leading policies, we can claim to offer real value for money for your clients.
We're proud that our covers do not contain a number of the restrictive conditions and exclusions that some other insurers litter their policy wordings with. Our policies are written in a clear, transparent way, so you can easily establish the exact level of cover you are purchasing on behalf of your client.
We also have the advantage of our policies being underwritten by Liberty Legal Indemnities, part of Liberty Mutual Insurance Europe Ltd, who enjoy 'A' ratings from major credit rating agencies. This is particularly important when choosing an insurer, as legal indemnity policies are often provided on an indefinite basis and can lie dormant for many years before being called into action. This means that should your clients need to make a claim, whether now or many years in the future, they can be assured that we will be around to handle it.
Whilst we argue that the choice of insurer should not hinge on the price, we are also not blind to the fact that it is a major factor. It's for this reason we regularly review our premiums, to ensure that we remain competitive. Though we don't offer specific price promotions or special offers, we're happy to help reduce costs for home buyers by offering lower premiums in circumstances such as where more than one legal indemnity policy is required or by combining two covers into one policy.
Getting what you pay for
If other insurers are prepared to give away their policies alongside others or discount them heavily, we think it's only natural to question whether the cover they are providing is really worth all that much in the first place. The way we see it, paying a little more for the right policy in the short-term is better than having cover that may prove inadequate in the long-term.