Brokers: Don’t Cut Out The Middle Man!
Most insurers encourage you to deal with them directly, but this is a huge mistake! Here is why you need a broker ASAP!
Published: Tuesday, April 25th 2017
We have all seen the adverts and heard the offers. Cut out the middle man and save! Go direct, and you will get a better deal. But, how accurate is this? What are you actually getting out in return?
The harsh truth of the matter is, almost nothing! In fact, you are probably getting out less than if you go through a broker. Despite the claims that you should be saving on premiums every month, if you look deeper into what you are paying for, you actually are not.
How is this possible? We have unveiled some core truths about going direct versus insuring through a broker. The reality might make you change your mind!
It Is Not Actually Quicker
Think back to the last time you applied for insurance.
Did you go through the full online application? Carefully filling out each section as accurately as possible? Having to find details of your car, bank account, basically blood-type information that you don’t have on hand? Once you've submitted it, it comes back to you with a rounded off quote, and the pop-up appears; a contact centre agent will be calling you to complete the quote and give you an actual figure.
A few minutes later, the phone rings. Should you miss this call, the phone will ring persistently for the next couple of hours until you actually pick up.
What follows, when you do eventually answer, is one of the most frustrating processes you can experience in your life. Re-completing every single bit of information you completed online, but with this agent on the phone. The same agent who has to keep reminding you that the call is recorded, the company is a member of the FSB Authority, and who has to ask you ten personal questions to make sure it’s you.
Getting a Broker
The first advantage here is, yes, you will only need to go through this process once. And, often, it will be a face-to-face meeting.
The biggest advantage of going to a broker is the fact that, once you have given over your entire life history, mother’s maiden name, and your uncle's estranged dogs details, you simply won’t have to do it again. The broker will take the information to various insurers on your behalf and you can carry on with your life. He will come back, several quotes in hand, and then talk you through which one is most suited to you.
The second advantage of the initial application stage is that it is a risk assessment done on you personally. The broker can ascertain your individual risk profile by taking into consideration your unique life choices and circumstances.
A contact centre agent cannot. Instead, the information that he is filling out is simply to complete the open areas in the system in front of him. This is then fed back into an algorithm, which generates a general risk ranking of you.
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It Is Not Necessarily Cheaper
Yes, direct insurers state here that you are cutting out the broker fee. Which is not entirely inaccurate. What they are omitting is the fact that included in their premium is the administrative costs from their side. That call centre agent who kept you on the phone for 90 minutes needs to receive a salary, as well as commission on the sale.
The problem with this is that this is not disclosed in your premium. You are given a round figure, with an excess, and that is about it.
When you go through a broker, however, their fee has to be disclosed by them. You know, up front, what you are paying for the broker fee. Broker commission has to also be disclosed to you, and all of these costs will be included in the premium, which you will be given when you are signing.
What also needs to be kept in mind, is the fact that a broker will do a different risk assessment on you, compared to the direct insurer. Going through a broker could land you paying a reduced monthly premium, compared to a direct insurer.
It Benefits You When Claiming
At the end of the day, after you have signed with a direct insurer, you simply become one of the numbers. The agent has made the commission and every time you call in, you simply have to speak to the next agent that picks up the call.
But, with a broker, you are their client. You are paying for the services. So, every time you have a question or need to change the policy, you simply need to call the broker.
Claiming is also made a lot easier through a broker. With years of experience, they will know the ins and outs of submitting a claim and ensuring that it is paid out. You are not simply one of the numbers in a direct company, and each part of the claim will be carefully examined and put through accurately in order to ensure that you gain what you are owed.
Are you starting to have second doubts about going direct?
We will assist with your claims, review your premiums annually and make any changes to your policy!