Tower Insurance has committed to removing the duty of disclosure from its sales and claims processes before the end of the year.
Currently, insurance consumers in New Zealand are required to disclose all material facts that an insurer might deem material. While insurers do ask questions, it is the consumer’s responsibility to provide any other information they think may be relevant, even if they are not asked a specific question.
Now, Tower has announced it will adopt a “Trust Both Ways” approach. On the one hand, it will be Tower’s responsibility to ask the right questions when customers come to buy insurance. Customers, on the other hand, will only have to answer the questions asked “truthfully,” and their claim will be accepted and paid.
Tower CEO Richard Harding acknowledged recent talk in the news about how little trust people have in insurance companies. While it’s hard to hear and we don’t agree with it all, “our own conversations with many Kiwis suggest that there is absolutely some truth in it,” he said.
Harding revealed one of the top concerns of many people is not knowing for certain if their claim will be accepted and paid.
“It comes back to the tricky, catch-all question that insurers can ask when you buy insurance, along the lines of ‘is there anything else that we should know?’ – which means that if customers unwittingly leave something out, they can be disappointed when it comes time to making a claim,” Harding explained. “Because of these concerns, we’ve started removing this question from our systems, processes and policies, and, by the end of the year, people who buy home, contents or car insurance from Tower will no longer be asked this question.
“We’re doing this because we trust our customers to be honest with us, and in turn they can trust that we’ll pay their claim. It’s about giving our customers certainty.
“Like we did with risk-based pricing, we led the way openly and honestly talking about these changes and we commit to this level of transparency for all changes we make that impact our customers,” he added.
