Take time to understand B&C add-ons, advises Kevin Paterson of Assurant Intermediary
Additional covers – often referred to as add-ons – to buildings and contents (B&C) policies can make a significant difference to the overall cover your client has in place as well as boosting your income.
While it is your client’s responsibility to get the sum insured for their home and their contents right, you have a duty of care to ensure they have all the information they need to select the right level of cover – some of which isn’t included in a standard B&C policy.
In essence, add-ons provide additional cover for specific events. On the surface, they look pretty simple but do you really know the extent of cover a valuable policy addition such as legal expenses really provide? Having a better understanding of them means you are better placed to advise which add-ons represent the best value to suit your client’s particular needs
Here’s a brief overview of the most common add-on covers:
<strong>Legal expenses</strong>
Sometimes called ‘family legal protection’, this doesn’t just cover civil actions relating to the property. Rather, it provides professional legal assistance and advice if the policyholder or their family becomes involved in pretty much any legal dispute.
This can include employment issues, disagreements with neighbours, and arguments with suppliers of domestic goods and services. It can even cover disputes with HM Revenue & Customs relating to an enquiry into a self assessment tax return or with a local authority over a parking ticket. Some will also extend to include motor accidents and so provide protection for costs pursuing claims for damages sustained while in a road traffic accident.
<strong>Home Emergency</strong>
This is not a replacement for contents insurance and doesn’t cover normal day to day home maintenance. It insures homes against sudden and unforeseen domestic situations which, if not dealt with quickly, would lead to further damage being caused, the home becoming unsafe, insecure or uninhabitable.
It will include call-out and emergency repair services for plumbing, drains and mains service supply, heating system failure and home security problems. Some policies will include an annual ‘health check’ for a boiler, others the costs of removing pest infestations from a home or garden.
<strong>Multi-appliance warranty</strong>
From cookers to dishwashers and fridge-freezers, it’s likely that most clients will have at least three white goods and more likely five in their homes while the number of household appliances is likely to be far higher. While covered for damage or theft under a contents policy, what happens if they break down outside the manufacturer’s guarantee period? Home insurance policies don’t normally include breakdown cover and buying individual warranties for specific items on the high street can be costly. A multi-appliance warranty is a flexible plan that allows your clients to cover generally up to five items but sometimes more, providing assistance with repair bills or a replacement if an item cannot be repaired. There is generally an age cap of eight years on each item as well as its value so do check limits.
<strong>Gadget insurance</strong>
Most multi-appliance warranties, however, exclude things like laptops, mobile phones, sat navs, iPods and other handheld electrical items – so a gadget insurance policy could represent a good top-up. Policies entitle your clients to repair or replacement of their electronic equipment. They will cover electrical or mechanical breakdown that occurs outside the manufacturer’s own guarantee period as well as accidental damage and theft. Some will even cover accidental loss although they generally only cover mobiles and PDAs.
<strong>Tips:</strong>
Take the time with your client to understand their needs so you can identify which add-ons might be appropriate and which to ignore. Getting the right cover that will kick-in when they need it most goes a long way to helping client retention as well as generating much-needed additional income.