Telematics continues to evolve in insurance

Telematics technology has proven benefits when it comes to encouraging more responsible driving, with research indicating better driver behaviour is one of the main advantages in using this innovation.

Black box or telematics technology is a way for businesses to collect data on how their employees are using company vehicles. Using telematics, businesses can collect information such as whether drivers are speeding or driving dangerously, as well as how long they spend on the road. This is important, as research indicates driver fatigue is one of the main causes of road accidents.

According to the most recent Telematics Benchmark report, improved driver behaviour, peace of mind and regulatory benefits are some of main pluses to using telematics. The research found when drivers use telematics devices, businesses achieve peace of mind knowing where their vehicles are on the road and can also plot more efficient routes, leading to reduced costs such as lower fuel bills.

Importantly, data shows businesses that use telematics can improve the safe driving record of their vehicles. Mercurien Insurance specialises in providing insurance to businesses that use tools such as telematics to manage their fleet of vehicles. One of its clients, a not-for-profit organisation with a vehicle fleet, saw speeding events per kilometre drop from 0.14 to 0.07 across two-and-a-half years. Additionally, at fault claims fell from just over 60 to just over 20 a year thanks to telematics.

As this shows, businesses that use telematics may experience a commensurate improvement in driver safety. As a result, some insurers look favourably on businesses that employ telematics in their vehicles.

Businesses collect the data and may provide it to some insurers, who then use it to make decisions on the policy and its conditions. Insurers may approve more favourable policies, including more cost-effective premiums, based on data showing better driver safety.

Turning to the public sector, the National Transport Commission is reviewing how telematics is used across the transport industry, especially among vehicles that are required to comply with the Heavy Vehicle National Law, as well as vehicles that are required by law to use telematics, such as taxis and buses.

Michael White, Steadfast’s Broker Technical Manager, explains telematics may be used by businesses to better manage how their fleets are operated and to also provide this information to their insurer.

“In the case of heavy motor vehicles, telematics can provide information on how the vehicle is being driven, speeds, how brakes are used and whether drivers comply with road rules,” he says.

Zurich Motor Fleet Underwriting and Risk Engineering is one insurer that has a telematics-based insurance policy. Zurich Fleet Intelligence (ZFI) uses telematics data gathered from its policyholders vehicles through black box technology. Subsequently, Zurich uses this information when assessing insurance policy applications and claims.

Often, Zurich’s clients already have devices in place in vehicles so they can monitor vehicles for logistics purposes. ZFI can draw on this data to assess how individual drivers behave when they are on the road. The technology also provides information to drivers about their driving performance, online and in real time.

However, another insurer, QBE, has exited the market, closing its Insurance Box product it launched in 2014. This technology provided people with a Drive Score and helped them become better drivers, by providing feedback on driving habits and tips on how to improve driving performance. It was the first product of its kind in Australia but will no longer be offered as a standalone product.

Despite QBE streamlining its telematics offering, this technology is likely to become more popular with insurers, businesses and regulators as it becomes more sophisticated over time.

Important note – This article is provided by Steadfast.

The information provided here is general advice only and has been prepared without taking in account your objectives, financial situation or needs. Steadfast Group Ltd (ABN 98 073 659 677, AFSL 254928)

Home & Contents Insurance at a glance

What is Home & Contents Insurance?

Home insurance can protect you from financial risk if your home is damaged or destroyed, and can also cover your homes contents if they are damaged, lost or stolen. You can take out cover for specific listed events only or for wider accidental cover, depending on your needs.

Why do I need it?

If your home and its contents were damaged or destroyed in a natural disaster or accident, or all your valuables were stolen, could you afford to replace them?

If not, we are here to help.

Home and contents insurance can even protect you against legal liability if someone is injured or killed on your property.

“Residential property worth up to $63 billion is at risk (from climate change) – and we believe this is likely to be an underestimate.”

Did you know?

  • Approximately 9% of homeowners don’t have buildings or contents insurance.
  • The estimated property loss from 140,000 claims across five catastrophic events in 2015.
  • Approximately 1 in 30 homes are burgled in Australia each year.

What can it cover?

Home insurance can provide you with extensive protection if your home suffers loss or damage – with a number of additional benefits included automatically. You have a choice of options, with different levels of cover and inclusions available.

The exact cover you can receive depends on the policy that you take out. But to give you an idea, here are some of the benefits a Home insurance policy may include:

Potential Benefits

A safeguard of up to 30% extra of your total sum insured, so you can feel confident you won’t be caught short if you have to rebuild (Does not apply to Base Listed Events Policy)

Cover for accidental breakages, damage caused by falling trees during a storm or the impact of a car

Automatic cover for flood and cover for fire or explosion

Automatic inflation adjustment to your buildings and contents sum insured

Cover for earthquake, tsunami, lightening strikes, storm, rain water, hail and wind and water damage from certain leakages

An extra 20% of your total sum insured to cover accommodation costs, if you need to move out while your home is being repaired or built

Cover for burglary or theft, caused by a forced break-in and vandalism or malicious damage

Environmental upgrade cover – up to $5,000, and extra costs of rebuilding to meet statutory requirements – up to $25,000

Liability cover of up to $30 million for injury or loss of life to a third party, or loss of a third party’s property on a building you occupy or own

Catastrophe cover up to an additional 30% of the building sum insured, for declared natural disasters

What usually isn’t covered?

Each policy is different, but generally you won’t be covered:

  • If your home is unoccupied for more than 100 continuous days (90 days for the Listed Event and Base Listed Event wordings).
  • For rust, corrosion, gradual deterioration, depreciation or wear and tear
  • For damage caused by rats, mice or insects

There are other exclusions which we can outline for you. In addition, there is a deductible/excess

Case Study

During the 2017 Northern New South Wales floods, Michael’s family home and all its contents were severely damaged by floodwaters. Fortunately, Michael had taken out home insurance.

His Home Insurance policy included automatic cover for flood, so it covered the costs of repairing the damage that floodwaters had done to the walls and floors of his home.

It also covered the cost of replacing his furniture and white goods. And, because he and his two children had to move out while his home was being repaired, his policy took care of the costs of living in rental accommodation during this time.

What you need to know about landlord insurance

If you’ve scrimped and saved in the hopes of achieving financial security through an investment property it makes sense to insure such a valuable asset.

It’s no secret that Australians are among the most real-estate obsessed people in the world.

Around two million Australians own an investment property. A disproportionate number of these people have their own business. They are typically hoping to set themselves up financially through what they see as a safe, easy to understand investment (and perhaps reduce their tax through negative gearing).

Buying property might be less complicated than attempting to play the stock market, but all investments have the potential to end in tears. Ian Mabbutt, the Head of Personal Lines at Steadfast Underwriting Agencies, explains why it’s a good idea for investment property owners to make sure they have the right landlord insurance.

What is landlord insurance?
“Landlord insurance is the home and contents insurance you take out on a property you own but rent out rather than live in,” Ian says. “It’s a policy that will cover you for most things – public liability, storm damage, fire, theft and so on. That noted, these policies don’t cover wear and tear. Also, if owners want to be covered for loss of rental income they need to choose – and pay extra for – the rent-cover option. Loss of rental income is the biggest issue owners face but rent cover isn’t standard on landlord insurance policies.”

Read the full Steadfast article here.

Insurers named in lawsuit after Noah’s ark attraction damaged by heavy rains

In the Bible, the ark survived an epic flood. Yet the owners of Kentucky’s Noah’s ark attraction are demanding their insurance company bail them out after heavy rains caused nearly $1 million in property damage.

The Ark Encounter says in a federal lawsuit that heavy rains in 2017 and 2018 caused a landslide on its access road. The Courier Journal reports the attraction’s insurance carriers refused to cover the damage.

The 510-foot-long wooden ark has been a popular northern Kentucky attraction since its 2016 opening. The lawsuit says the road has been rebuilt. The ark was not damaged.

The suit names Allied World Assurance Co. Holdings of Switzerland, its use company and three other insurance carriers.

Ark Encounter seeks compensatory and punitive damages. The Swiss company hasn’t responded in court filings.

This is an Insurance Business mag article. 

How to minimise being underinsured

Many Australians, especially those who own businesses, discover they don’t have the cover they need in the worst possible circumstances.

Insurance is one of those subjects that many people glaze over. So, just to test how knowledgeable you are about this important but unsexy topic, see how many of the following you can answer.

Questions

  1. What type of insurance can provide cover if a natural disaster results in my business having to shut down for a period of time?
  2. What type of insurance can provide cover if a client takes legal action against me? In what industries is it mandatory to have this insurance?
  3. What type of insurance can provide a payout to cover costs relating to everything from a broken window to a tax audit to a light-fingered employee?
  4. What type of insurance is legally required if you employ staff? What is the penalty for failing to take out this insurance?

Answers:

  1. Business interruption insurance.
  2. Professional liability insurance (also called professional indemnity insurance). Those working in the medical, accounting, law and financial advice industries.
  3. Business insurance.
  4. Workers’ compensation insurance. It varies from state to state but you’ll typically be at risk of jail time if an employee has been injured (or worse). NSW imposes a ‘double avoided penalty’ equivalent to double the amount you should have paid in workers’ compensation premiums.

One in ten businesses have no cover

If you failed to get all (or any) of the answers right, you can take solace in being a typical Aussie. Survey after survey has shown that Australians don’t have a good grasp on what insurance policies might be relevant to them. Unsurprisingly, Australia is one of the most underinsured nations in the developed world (underinsurance is when an individual or business has no or inadequate insurance to cover their legal liabilities, or the cost of loss or damage to their assets).

The Insurance Council of Australia’s 2015 report on non-insurance in the SME sector showed a non-insurance rate of 12.8 per cent. Paul Nielsen, director and chair of the Council of Small Business Australia (COSBOA), says many SMEs are in denial. “Business owners tend to think it won’t happen to them. Because of this, some SMEs view insurance as dead money,” he says.

Read the full Steadfast article here.

Why small businesses use an insurance broker

Small business owners tend to be born optimists with little inclination to think about what could go wrong. That’s why it pays to have an insurance broker in your corner to safeguard what you’ve worked for.

Paul Harrison’s family-owned shoe shop in Sydney’s Neutral Bay has operated out of various locations for more than half a century. It’s used insurance brokers for the past 35 years.

“When I came on board, we already had insurance but not at the level we needed,” says Harrison. “Most of the insurance we had was good, but it took time. If we made a claim, an assessor would come along; then he’d send you forms to fill out before repairs could begin. All that time you’re not trading.”

Save yourself time

Anyone who has compared car, home or health insurance policies to try to find the best deal knows how time consuming it can be. Choosing a business insurance package is even more complex because of the range of risks requiring cover.

A business insurance broker will not only save you time sourcing the right policy, they can also save time and money if you need to make a claim.

That was Harrison’s recent experience with his long standing Steadfast insurance broker.

“We had a leakage from the residential unit above our premises that ruined our ceiling, stock and floor. With rent and wages to pay, you can’t afford to be out of business for two months. Our business insurance broker was onto it straight away. We were able to replace our flooring within two days and probably missed five days’ trading in all”.

Utilise your business insurance broker’s experience

Small business owners are great at what they do, whether it’s running a café or a consultancy. But they are rarely insurance experts. “What they may not understand is the broad range of risks they face,” says Dallas Booth, chief executive of the National Insurance Brokers Association(NIBA).

A business insurance broker will help identify the risks your business faces, then get the insurance package that matches those risks. “There’s no point buying a business package off the shelf if it only covers some of your risks,” says Booth.

“I don’t think you can do that on your own. You may think you know what can go wrong but you never realise how much [an adverse event] impacts on your business going forward,” says Harrison.

Read the full Steadfast article here. 

How to create and maintain an SMB inventory list

It can take just moments for fire, flood or thieves to wipe out years of hard work, asset accumulation and stock. But it can be months before you realise the full extent of the damage – and even longer to recover – if you don’t have a detailed and up-to-date inventory list encompassing business asset including equipment, as well as stock.

It’s fairly easy to name your business’s key assets – you’ll probably think of the premises, and the tools and technology that you handle every day.

But what about those items that aren’t necessarily right in your face and that you accumulate over time? Signage, cleaning equipment and office supplies such as staplers and labelers can add up to a significant investment if they all need to be replaced at once.

Because they are not handled or used every day, it can take time to realise they were stolen or destroyed. But this doesn’t make them any less significant to the running of your business.

Not having these items can hamper your efforts to get back up and running quickly. And this – minimising the interruption to your business – is where a detailed and up-to-date office inventory list is important.

To view the full article, please visit Steadfast Well Covered here.

Insurance council declares catastrophe for Townsville inundation

The Insurance Council of Australia (ICA) has declared a Catastrophe for Townsville insurance policyholders affected by torrential rain and inundation.

ICA CEO Rob Whelan said, “The Queensland Government and emergency services have informed the Insurance Council that dozens of homes and businesses may have been affected by the downpour and resulting inundation of the past few days.

“Many other properties, as well as private and commercial vehicles, may have also have been damaged.

“It is possible many more will be inundated in coming days, with some state government projections indicating thousands of homes could be affected. Therefore, the ICA has declared a Catastrophe to help escalate the insurance industry’s response.

“As of 8pm on Saturday, insurers have received about 1900 claims, with insurance losses estimated at $16.7 million. Many more claims are expected this weekend as residents examine the extent of their losses and contact their insurers.

“The ICA has declared this Catastrophe to help reduce the emotional and financial stress being experienced by families and businesses, and provide them with peace of mind that their insurer is there to help.”

Under the declaration:

  • Claims from affected policyholders will be given priority by insurers
  • Claims will also be triaged to direct urgent assistance to the worst-affected
    property owners
  • The ICA has activated its disaster hotline – 1800 734 621 – to assist policyholders if they are uncertain of their insurance details, or have general inquiries about the claims process. Note: This is NOT a claims lodgement line
  • ICA representatives will be mobilised to work with local agencies and services and affected policyholders
  • An industry taskforce has been established to address and identify issues that arise

Further information will be available soon on www.disasters.org.au

This is an original Insurance & Risk article

Lessons learned from Sydney’s ‘catastrophic’ storm

Sydney’s violent hailstorm, which has left millions of dollars of damage in its wake, is a crucial reminder of how important it is to protect yourself against potentially crippling damage to your business.

The incident, declared a ‘catastrophe’ by the Insurance Council of Australia, led to more than 15,000 claims in the 18 hours after it swept across Sydney and parts of the Central Coast on the evening of Thursday, December 20. It is anticipated the damage bill could reach more than $100 million.

Car dealerships, also severely hit in Sydney’s 1999 hailstorm, could submit claims to the tune of around $50 million, illustrating the extent to which small businesses can be exposed to risk and damage during extreme weather events.

“In big events like these, the resources might not be available to immediately secure a damaged roof. But it is important that it is attended to in reasonable time, and that it isn’t left for months. Because if it is, that could affect your claim”

Which is why it is vital to be proactive in mitigating your business’ loss in such situations, in order to meet your insurance obligations and return to business as usual as soon as possible.

To view the full article, please visit Steadfast Well Covered here.

Why your business needs an extreme weather action plan

Extreme weather conditions are increasing around the world, and Australia is no exception. Experts predict this summer will, again, be one of the hottest on record, with severe bushfires, storms and floods all set to increase.

In the absence of the vast resources of larger organisations, there is an urgent need for small businesses to have specific plans in place.

Preparing your property and fully understanding the risks in the event of extreme weather events, in both regional and urban areas,  such as storms, fire and cyclones is vital. However you also need an overall strategy to protect your business and its assets to ensure its survival.

Building a support network

After Cyclone Larry hit Queensland in 2006, a National Climate Change Adaptation Research Facility report found businesses and individuals with strong community ties recovered better, as they relied less on overburdened government systems and their workers were less inclined to leave the area.

“Individuals, households and groups who have strong social networks are able to draw on shared material and social resources to sustain them during and through the aftermath of a cyclone,” the report said.

In both urban and rural settings, banding together during a crisis can be mutually beneficial. Having a plan for how small businesses can help each other can be the key to survival.

After the northern NSW town of Murwillumbah was ravaged by flood in 2017, locals led the recovery effort and a database of hundreds of volunteers was created to help those in need.

“Constantly we’re expecting governments and services to fix things for us,” organiser Carmen Stewart told the ABC.”I’m interested in what happens when a community is engaged first, then bringing government and services in as a partner, not as the leaders.”

Be prepared

Complacency and a failure to adapt to the increased likelihood of extreme weather is a real danger for small businesses. Research conducted by James Cook University revealed 90 per cent of cyclone-related insurance claims could be avoided through proper preparation.

Ensure you have formulated an emergency action plan for your business in the event of extreme weather, such as flooding. Educate your employees so they understand the risks and know how to react.

There are other vital proactive measures you can take. Regular maintenance on your property ensures it is as well placed as possible to handle and recover from extreme weather events. Contracting an expert to assess the structural integrity of your dwelling ensures any weak or degrading materials particularly vulnerable to damage can be repaired.

Clearing your property of refuse, such as fallen branches and bushes can help to ensure any damage severe storms can cause is limited. This includes securing outdoor items and garaging vehicles and machinery.
Read the full article on Steadfast well covered.