The skills of damage restoration companies are key to the high net worth market, but few brokers understand their work. Graham Orriss reports
It has become quite common to suggest that the internet is commoditising the insurance marketplace and brokers are feeling the squeeze. However, it is equally true that this type of one-size-fits-all policy clearly doesn't suit everyone.
The increasing prevalence of high net worth policies from more mainstream insurers is testament to this. Everyone is fighting for these higher value clients.
This is where the services offered by brokers really come into force. More than 80% of high net worth individuals use brokers to arrange their insurance. The insurance requirements in the high net worth market are more complex, so brokers need to know exactly what each and every client needs.
However here is the conundrum: how many brokers really understand what happens to their clients' claims once the insurer has agreed to pay? All brokers know that insurers sub-contract work to their preferred providers of restoration services. What may not be known are the criteria by which these providers win 'preferred provider' status.
Restoration companies are, as far as the insured is concerned, representatives of insurers. They are entirely responsible for the quality of all the work carried out on behalf of insurers. And, of course, it is only by how well claims are settled that an insured will really judge an insurer - and a broker.
As a broker's primary obligation is to its client, surely it needs to be aware of the reputation and credentials of the companies undertaking the clean-up work.
This is particularly crucial for brokers with very high net worth clients where they may be responsible not only for advising on house and contents, but on motor and business policies as well. When people pay a good deal of money in premiums, they quite naturally expect outstanding quality and consistency of service.
In reality, brokers and restoration specialists don't need to communicate directly with one another, but they do need a proper understanding of the services each provides. And it is clearly in the area of damage restoration that the most confusion arises; and where there is most room for mistakes.
So what can brokers do?
First is to understand how good restoration specialists work. The range of skills required to undertake this kind of work is huge. For example, it is entirely within our normal working remit to have projects on our slate as diverse as drying out and restoring medieval plaster in a heritage castle, to ensure no ultimate damage is caused, to drying out 25 council houses, flooded by a burst water main, in the fastest possible time.
Naturally, these projects require entirely different skills, both in terms of how the client is managed and how and by whom the work is undertaken.
Details of a few of our recent jobs will illustrate the breadth of knowledge and customer care required.
The first was at a large private house in Windermere. The owners had a collection of paintings and pictures worth millions that had been damaged by fire. The insured was, of course, very concerned that only the best craftsmen should work on the restoration of the pictures.
We work regularly with fine art restorers, who also work for the British Museum. We arranged, in this case, for the entire collection to be transported to London to be restored. The end result was that pictures were saved and the client was extremely happy.
On another job we needed to find a way of cleaning smoke-damaged suits, where the owner was not prepared to have them dry cleaned. In the end, they were sent back to the tailor, hand sponged and pressed, with the pockets removed before pressing, so no marks showed through.
But the example that really demonstrates the dangers of employing a contractor, who does not have specialist skills, was in a Victorian house that had been flooded. The claim was settled and the clean-up and restoration work carried out by a builder. In 99 cases out of 100, if the builders were conscientious, all would have been fine. However, in this house, there was an original layer of paint that contained arsenic. The builders were unaware of this and so simply covered it over.
Arsenic paint, when damp, gives off fumes. The owner, in this case, was actually made seriously ill and spent several days in hospital. We were brought in to safely strip back the walls and paint and prepare the property to be fully restored. So not only was the insured's life unwittingly endangered, but the insurer had to settle the claim twice.
Brokers clearly need to be aware of who insurers are using to restore their clients' property following a disaster and to feel happy that their customers will get the very best service when they submit a claim.
The quality restoration firms will have demonstrable processes and excellent client management credentials. They will also have a vast contact book of art, antique, heritage and other specialists with whom they work regularly to ensure they bring in the most appropriate skills for the job in hand.
Brokers simply need to reassure themselves and their clients that they are getting the best possible claims handling service, within the terms of the policy. IT
'Graham Orriss is managing director of The Revival Company