Insurance: How State would settle a major burglary claim

By John Grant

We asked some high-profile New Zealand insurers, including State Insurance to look at a fictitious burglary claim and indicate how they would proceed to settle the loss. You can find the overall results of this comparison here.

With a burglary ocurring around every 8 minutes in New Zealand it seemed a good test of our insurers to see how they would respond to a claim. We compared five insurers and the following is the detailed response we received from State. The claim involved the loss of 15 items that had been stolen during the burglary of their customer’s residential property.

This is the summary of the items stolen:

State was very helpful and responded on time to our enquiries. They also provided a detailed statement which follows below;

BURGLARY CLAIM - STATE HOME COMPREHENSIVE POLICY

State has been providing New Zealanders with an extensive range of personal and business insurance services for over 105 years. Our team work very closely with our customers throughout the claims process. The State Claims Process At State we do not require a claim form to be completed. Our customer has just experienced a very stressful event and we want to make the process as simple as possible. Once they have phoned in to tell us of the event, our team will work closely with them to build a report on the circumstances of the loss.

A State Loss Adjuster will be assigned to the customer to assist in the identification of the items that have been taken. Our team of in-house Loss Adjusters and Claims Consultants, work alongside the customer throughout the entire claims process. Obtaining information about the burglary. For a claim of this nature the team will work with the customer to lead them through the process to help settle the claim as quickly as possible.

We would ask the customer - when they believed the burglary occurred - when the Police were notified and when did they attend - was any damage done to the property during the burglary - how entry was gained. We want to make sure the customer has things back in order as quickly as possible. The Loss Adjuster will assist the customer to complete a Loss Schedule and look at any documentation supporting the claim. They will make enquiries and get current values of the goods so that we can replace items of the same specifications.

As an example, in this claim the Loss Adjuster will: - Explain why the customer has a large quantity of alcohol - Review any supporting documentation the customer has( ie: the computers: operating manuals, discs or receipts) - Assess any damage done to the property as a result of the burglary - Find the artist who created the statue to find the true market value. We would have jewellery experts talk directly to our customer so that we can try to replace the jewellery. If not, then they can establish an accurate indemnity (eg: market) value of the items stolen.

The following is a list of the settlement information provided by State Insurance;

State's depreciation amounts seemed higher than average. Their payment was impacted by the policy limits.

Positives for State Insurance

They were very willing to assist and answer questions. The amount they offered was close to expectations. They made a strong point about the level of one-on-one support they provide to their customers who suffer losses such as this. They were prepared to cash-settle just over half the overall items. They had gone to a lot of trouble to ascertain the value of the computer and to take into account the substantial upgrade it had been through 2 years earlier.

Negatives for State Insurance

The 5 year computer replacement policy is limiting. Depreciation rates seemed at the top end of the scale. Overall for a lower priced insurer with a reasonably well scored product, the major issue this example highlights is the significant impact that lower policy limits can have where items are not specified. However on balance it was a reasonable balance between price and coverage.