Insurance paperwork is often to be found gathering dust in some rarely opened drawer. Once these agreements are formalized they are often put away: a case of out of sight out of mind. Many of those insured are hardly aware of the policies they have taken out because checking them out on any kind of regular basis is very tedious in the way that filling out tax returns is tedious. But this neglect costs the German insurance consumers a fortune to the tune of 20 billion euros collectively each year (according to the Federal Association of Insurance Advisors - Bundesverband der Versicherungsberater or BVVB).

According to the BVVB private insurance customers could typically save up to 20 to 30 % if they were to quit their redundant contracts and change to a more favourable tariff. That would translate to a 400 euro saving per household annually in the Federal Republic. Even small scale entrepreneurs are often wrongly insured. They could often shell out 30%, or even 50% more for their cover than they need. Dorothe Morain, head of the BVVB, believes that most people are a long way short of exhausting the savings that might be made through switching providers. Most Germans are over insured, according to Morain. For example even during their student days they are burdened with house contents insurance even though their rooms only contain a bed, chair and a cupboard.

Either that, or these have bought a buildings policy which the same provider then markets under a different "brand" without notifying the customer at all. Elke Weidenbach of the Consumer Advice Centre of Nordrhein Westfalen advises consumers to regularly examine policies taken out. This is especially true of Autoversicherung or car insurance. Weidenbach notes that she ends up changing her Autoversicherung practically every year.

The poor fit between the consumers' requirements and the cover afforded by the policies they eventually buy is partly down the dubious recommendations of insurance brokers who are all too often looking after their commissions ahead of the clients interests. One straightforward way to bypass the Makler (broker) is to check out an online comparison or Preisvergleich site. The best of these are independent and enjoy wide market coverage.

26.2.2008

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