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Supply chain pain and the impact on claims
The covid pandemic and war in Ukraine have wrought havoc on global supply chains, and this can have a significant impact on how insurance claims are handled should disaster strike.
As insurance brokers it’s our job to help you through the claims process, but also to warn you in advance of any likely complications.
So, let’s start at the start. Claims timelines are certainly being stretched at the moment due to shortages of materials and parts – that’s a global problem, too – but also as a result of hundreds of thousands of catastrophe claims that insurers are working through.
It’s a massive exercise after the record-breaking eastern states floods, but insurance is there to deal with catastrophes on any scale. If the policy responds, insurers will always pay their claims, and we’re here to make sure your claim is handled professionally and properly.
But be aware that right now the claims process is overloaded, so it’s taking longer than normal.
If your property is damaged, in many locations you’ll find the wait for tradesmen to arrive is going to be a long one. There simply aren’t enough tradesmen to match the massive number of damaged businesses and homes that need repairs or rebuilds. The Insurance Council recently confirmed that average rebuild times following the floods catastrophe have blown out to 14 months.
This could mean that your business is out of action for longer, so there might also be a knock-on effect to your business interruption cover.
For residential properties, there are implications for temporary accommodation entitlements, which are usually restricted to a 12-month period.
The claims crunch is also affecting vehicle repairs in many instances, with spare part supply problems plaguing the smash repair industry. It’s an issue that again affects businesses if they find the replacement vehicle they need to buy isn’t going to be available for months, either.
Waiting lists for cars, and particularly commercial vehicles, are growing and sometimes stretch to a year or more, so if your business relies on vehicles, you could be left exposed.
Many of these issues are outside insurers’ control, but it still pays for you to be aware in advance so that contingency plans can be made.
You may also need to be open to more flexible ways of getting a claim resolved, such as accepting alternative replacement vehicles or – where it’s safe – second-hand panels and other non-mechanical items.
Unfortunately, shortages are often accompanied by price rises, and inflation in the construction and motor vehicle sectors is rife.
As a result your sums insured may not be at the level required to allow for like-for-like replacements, and they can get overtaken very quickly.
That’s why it’s vital to talk to us when you’re working through challenges like this, so we can be totally sure your insurance cover is set up to respond in the best possible way.
Making a claim is never easy, particularly in the current environment, but we can help you put things in place to make it as painless as possible.
And don’t forget – insurance is still vital for your business. There may be frustrations in working through a claim until these issues play out, but leaving yourself open to a total loss is unthinkable.