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The Psychology of Risk: Why We Avoid Insurance & Why Brokers Help
You lock your door at night, double-check the stove, and maybe even glance at your smoke alarm. Then you sleep with confidence and peace of mind.
However, when it comes to insurance, you just shrug and barely give it a thought. You think that it’s alright because nothing bad will happen to you anyway.
Sounds familiar ... right?
Don’t worry, it’s not just you!
Our brains are wired to disregard risks we can’t see. So, we often downplay the odds of something going wrong in our lives.
As a result, we’re caught off guard when perils strike unannounced.
What can you do then? That’s where insurance brokers step in to help you face reality without panic.
Let's address your doubts with Tank Insurance, your go-to insurance broker in Sydney, to understand why your mind avoids insurance and how brokers can help you embrace the safety net you need.
Why Our Minds Dodge Risks
Our brains are brilliant and clever. But newsflash: they’re not perfect. When it comes to risks, our brains love playing some classic tricks on us that leaves us underinsured, exposed, or vulnerable. Here’s what’s going on:
- ‘I’ll Be Fine’ Mindset: One way or another, we all reckon we’re untouchable. For example, you might be thinking that you will never crash your car as you cruise down the highway. However, keep in mind that life doesn’t send warnings.
- Sticking with What’s Familiar: Change may be scary for you so you keep that outdated insurance policy. Or you don’t get any coverage at all. But keep a close eye on your surroundings. Your business may now have twice as many employees, or your once flood-free area is no more.
- Loss Aversion: Paying for premiums feels like money down the drain, so you obsess over that cost more than the potential disaster of, say, a burst pipe flooding your shop or a fire damaging your cafe.
These biases are not simply harmless; they create serious gaps in your protection. Unfortunately, underinsurance is fairly common in Australia. According to the Australian Securities and Investments Commission (ASIC), about 80% of homeowners are underinsured for rebuilding costs and other important coverages.
That is why insurance brokers are essential. They don’t just sell policies, they help you see past your blind spots and make risks feel manageable instead of overwhelming.
Cyber Liability Insurance is designed to help protect you from claims and support your profitability in the event of a cyber breach or attack.
Public Liability insurance is there to provide protection if someone makes a claim against the insured, the business or its employees.
A business insurance pack can provide cover for your business premises and contents, against loss, damage, theft or financial loss from an insured interruption to the business.
QUESTIONS? JUST ASK
Marel Pencev
How Brokers Rewire Risk Thinking
How do insurance brokers turn your risk-dodger brain to pro-active and confident decision makers? Well, insurance brokers are part educator, part translator, and part cheerleader. Here’s what they bring to the table:
- Showing What’s at Stake: Insurance brokers spell out real risks for you. For example, a retailer might not see that a simple slip-and-fall incident can lead to a $50,000 liability claim. What insurance brokers do is to make those ‘what ifs’ crystal clear.
- Simplifying Jargons: Have you ever tried reading an insurance policy and felt like it’s in foreign language? Insurance brokers make sure it’s not a headache for you. They explain terms, such as ‘indemnity’, in simple, plain English so you don’t get confused.
- Making Policies Suitable to You: Let’s be real, insurance policies are not one-size-fits-all. Whatever your industry and whether you’re a tradie or a landlord, insurance brokers, tailor coverage that fits you so you don’t have to pay for unnecessary add-ons.
Imagine you own a small business and thought business interruption coverage was too much. An insurance broker then explained how a flood can damage your equipment and halt your business for months. After the flood, your coverage saved your business from downfall.
This is what brokers do. They don’t judge you. They listen, empathize, and guide you to make smarter choices for your business or home.
The Reward of Facing Risks
Tackling risks is rewarding. You will definitely have enough room to relax. You don’t have to stress over nicked gears, damaged equipment, or clients who sue you. Getting the right coverage is like a deep breath of fresh air. And with your trusted insurance broker, things will be even better. Here’s how:
- Saves You Time: Insurance brokers will get you the best policies. So, you don’t have to wade through fine print.
- Gets You Better Terms: They negotiate with insurers to get you the best deal at a better price, often saving you money and making your coverage solid.
- Claims Support: If disaster strikes, brokers are your advocate. They handle the needed paperwork and fight for your payout. So, you can focus on getting back on track.
We take this up a notch with a client-first approach. It’s not just about policies and coverage, but it’s about making you feel understood and protected. With us, insurance stops feeling like a chore.
QUESTIONS? JUST ASK
Marel Pencev
Cut Through Your Risks with An Insurance Broker
It’s human nature to avoid thinking about worst-case scenarios. We convince ourselves that nothing bad will happen or that insurance is too complex to bother with. But that’s exactly why we end up vulnerable. That’s where we come in to flip the script.
As your supportive partner and one of Sydney’s trusted insurance brokers, Tank Insurance can help you go beyond your biases and simplify your choices. We hear you and we are with you so you can turn that dread into confidence. Let us address your doubts, reach out to us now!
With a broker by your side, you’re not just covered. You’re understood and ready to face whatever life throws your way.
General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.
All information above has been provided by the author.
All information above has been provided by the author.
Marel Pencev, Tank Insurance, ABN 22 652 716 964, AFSL 478959
This article originally appeared on The Psychology of Risk: Why We Avoid Insurance & Why Brokers Help and has been published here with permission.
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