Does It Pay to Read an Insurance Policy ?
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IT has been said that the business man who reads his insurance policy 'is the exception that proves the rule. All printed forms seem to have a mesmeric effect. We peruse the written portion ; the rest is taken as read.
Yet even that conscientious man who reads through the reasonably large type on the front of his policy will probably falter at the numerous paragraphs in small typo on the back, and if he struggles with the first few sentences his taste for solid literattre will be quickly satiated.
After all, for the ordinary business man to read these paragraphs, which contain the conditions governing the policy, is rather waste of time. What does he know of "average," "contribution," "subsisting insurances," and other technical matters? The fact is, insurance under present-day conditions is a very complicated -business, and insurance companies are bound to limit their liability under a policy by rigid conditions, as otherwise they might be called upon to meet losses which were never originally contemplated.
These limitations are no hardship to the insured, so long as he understands them and so long as he really gets the insurance cover he requires. The question is how to know this? Will it pay the business man to give the time necessary to study a very complicated business which is outside his regular scope, and, also, once having mastered the subject, to continue the study In order to keep up to date?
The assured may consider that the companies employ experts and will see that he is suitably covered. On thinking over the matter, he may remember that the company, in sending him the policy, ask him to read it. Why do they do this? It is because, reasonably enough, insurers, like other business men, expect the other party to a contract they enter into to look after
his own interests. A first-class insurance company treats its assured well on the question of claims, and, as a rule, in case of any honest mistake or misunderstanding, is prepared to make an ex gratia payment in the case of loss, but does a business man want a payment at the grace of an insurance company 2
Much water may have passed under the bridges since the policy was effected ; the management of the company may, to a considerable extent, have changed, and a Pharaoh may have arisen whose views on loss settlements are not those of Soseph. What a business man wants is a policy that is water-tight and on which he can legally require payment in the event of loss. Moreover, he has not the time or the special knowledge to decide which is a first-class company and one which views the class of insurance required with special favour, or a company unworthy of confidence. He requires a specialist to undertake all these matters for him.
The specialist indicated is the insurance broker, whose duties, briefly, are to discover the insurance requirements of his client, to obtain insurance for those needs at the lowest rate commensurate with security, and to see that his client understands and can comply with the conditions on which the insurance is granted.
An insurance broker not only looks after the interests of his clients in this way, but at the same time it is his duty to make clear to the insurance company the real circumstances of the risk to be Insured, and in this way he prevents misunderstandings, thus helping both insurer and insured and being instrumental in securing efficiency and consequently economy.
It will be realized that an insurance broker who performs such important duties should be fully qualified and of thorough reliability. Under the existing law, any man may style himself an insurance broker, whether qualified or not, and It is, therefore, important that the insured should have some means of knowing what insurance broker to employ.
If he will select an incorporated insurance broker he will know that he has the services of a member of a society, the Corporation of Insurance Brokers, one of whose principal objects is to ensure for the community the existence of a class of insurance brokers who can be relied upon as befing trustworthy and duly qualified to perform their responsible duties. AU tiff members of this Corporation are qualified by examina ton or long experience.