Insurance for tradies

The trades are the most misclassified group in New Zealand insurance, because the word covers such a wide spread of risk. An electrician working on residential fit-outs, a plumber on new builds, a roofer, a scaffolder and a forestry contractor are five very different underwriting propositions, and an insurer that treated them alike would go broke.

What separates them is not skill. It is height, machinery, load and consequence. Insurers look at how far you can fall, what you operate, how much you lift and how far you are from help. A licensed trade with a qualification behind it also tends to rate better than unqualified labouring doing similar work, partly because qualified people are more likely to have realistic redeployment options after an injury.

The second thing that separates tradies is not the trade at all — it is whether you are on wages or on your own account. An employed sparky has sick leave, a payroll and someone else worrying about the invoices. A self-employed one has none of that, and a fortnight off is a fortnight of nothing coming in while the ute payment, the insurance and the accountant keep going out.

Ask a tradie what they are insuring against and most will describe an accident. Ask what actually stops tradies working long-term and the answer is usually different.

That is the argument for private cover in a trade, and it is not the argument most people are sold. You are not buying protection against falling off a roof. You are buying protection against the diagnosis that has nothing to do with your job.

These are the details that decide whether the cover does what you expected. Read them before you compare on price.

• Your occupation class — ask what class you have been put in and what duties that assumes.
• The benefit period. A two-year benefit period on a heavy trade is a very different product from cover to 65.
• The waiting period against your actual cash buffer. Self-employed tradies usually need four weeks or less.
• Whether the policy is agreed value or indemnity, which decides how hard a claim is to prove on variable income.
• How the policy offsets ACC, and whether you are effectively paying for cover that ACC would duplicate.
• Whether TPD is own occupation or any occupation. For a trade, any occupation is a hard test to meet.
• Cover for the business as well as you — a ute on finance, a lease, an apprentice’s wages.

Every New Zealand insurer writes income protection for the trades to its own wording, and the words are where the money is. Two policies that look identical on price can pay very differently when it matters. Closing that gap is the entire job of an adviser.

• Trade classifications are not consistent across insurers. The same duties can be a class 3 with one and a class 4 with another, and the premium difference is not marginal.
• Where one insurer caps a heavy trade at a two-year benefit period, another may currently offer five years for the same work.
• Business expenses cover, which pays fixed overheads while you are off, is frequently missed for self-employed tradies and is comparatively cheap.
• An adviser can coordinate your private cover with your ACC setting so you are not paying twice for the accident risk and nothing for the illness risk.

There are three ways to buy life cover in New Zealand, and they are not equivalent. You can buy direct from one insurer, which means you see one product range and one underwriting appetite. You can buy through your bank, which usually means a single insurer’s product sold under the bank’s brand, often with narrower definitions. Or you can go through an adviser, who quotes several insurers at once and is required to put your interests first.

The premium you pay is the same either way. Insurers build adviser commission into their pricing whether or not an adviser is involved, so going direct does not get you a discount — it just removes the person whose job is to argue your corner at application and at claim time.

• An adviser can see which insurer is currently taking your health history on standard terms, and which one will load or exclude it.
• An adviser can structure cover across two insurers if that produces a better outcome than putting everything with one.
• An adviser handles the underwriting back-and-forth, and is the person who chases the claim when a family is least able to.
• An adviser has to document why the recommendation suits you, which is a written record you can hold them to.

We are a referral service, not an insurer. We do not quote premiums and we do not sell policies. What we do is put you in front of one licensed New Zealand adviser who can compare the market properly.

1. 1

   You tell us what you are looking at

   The form takes about a minute. Nobody asks for your medical history on a web form — that conversation happens with the adviser, properly, and only once you have decided to proceed.

2. 2

   An adviser calls you

   A licensed New Zealand adviser talks through your situation: who depends on you, what you owe, what you already have in place, and what you are actually worried about.

3. 3

   They compare the market

   The adviser quotes across the major insurers, checks which of them will take your health history on the best terms, and puts the options side by side in writing.

4. 4

   You decide, in your own time

   There is no obligation and no cost to you. If the answer is that you already have enough cover, a good adviser will tell you that.