What is a major disadvantage for an insured with a direct insurance policy?

The correct response highlights that one of the significant disadvantages for an insured with a direct insurance policy is the lack of independent advice concerning disputes on claims. This situation arises because, in direct insurance, the insured typically deals directly with the insurer without an intermediary, such as an insurance broker or agent. While direct communication may seem advantageous, it can limit the insured's perspective on the claims process and their rights.

Without a broker or an independent advisor, the insured may not receive objective assistance to navigate disputes and interpret policy wording effectively. This can lead to misunderstandings of the policy terms and conditions, making it challenging for the insured to contest a claim denial or negotiate a fair settlement. Access to independent advice is crucial for ensuring that the insured is fully informed of their options and potential recourse available to them.

The other choices either do not apply specifically to direct insurance model disadvantages or concern aspects that might not be universally experienced by all insured under such policies. Claim processing times can vary regardless of the insurance model, and recourse to an Ombudsman can depend on specific circumstances rather than the format of the insurance policy alone. The potential for losses related to insurer insolvency also applies regardless of whether a policy is direct or through an intermediary, as safeguards against insolvency