Trying to explain to a client who purchased an unoccupied property insurance from you some time ago that they are not insured for anything but fire, aircraft, explosion and earthquake at the point of a claim is always tricky. Sure, if you have backed up your advice at the time with the right sort of words, then your firm’s PI policy will be in the clear, but if you haven’t it’s likely that a client who perceives that they have no place to go financially may decide to pursue you.
Clients have a habit of taking the cheapest option much of the time but not really understanding, beyond the premium, what the implications of that decision are until it’s too late. Some time ago we decided that we would not sell limited perils insurance for existing structures however badly our clients remonstrated about the premium of an all risks cover. What we found is that the vast majority are willing to pay for all risks if they understand clearly what the differences are between the two policies and why we don’t offer them.
Offering FLEA products focuses the client’s mind away from the cover considerations and firmly on premium. When you take this advice in the context that less than 20% of our claims are fire related, you’ll understand why taking a firmer line at the point of sale is doing you and your client a favour.