Aggregators make everything so simple. They ask only a few basic, easy to answer questions and then find the cheapest deal – and those meerkats are so cute! It’s hard to believe they’re market disruptors.
But it’s really a case of buyer beware. The cheapest insurance policy isn’t necessarily going to be the right one, and your situation and needs may be a lot more complex than the answers to those few questions can indicate. You may have to buy several policies, and what you wind up with might not be the cheapest option. In fact, by going direct you may miss out on the best deal.
What can a broker do for you?
Most people have multiple insurance needs, especially if they are in business. If you go direct you could spend a frustrating amount of time trying to find the products that fill the bill. And research indicates that you’re quite likely to be underinsured.
If you buy your insurance through a broker their knowledge of available products and understanding of your particular risk profile means that they can choose the right cover and bundle policies into a comprehensive program that covers your specific exposures.
Direct insurance does tend to be simple – and basic. Even if you join a call centre queue the operator may not be able to answer your query if you want more than single product cover. It's unlikely they'll be qualified to provide actual advice. You could risk not being covered completely.
A broker can explain what you need, why you need it and how it works, and you can rely on them to cross-check the policies to ensure they meet all your requirements.
An insurance broker can also parse out the wording in policies to make sure that you don’t get caught out by exemptions hidden in the fine print. And if you do have to claim they can act for you, streamlining the process and getting you a resolution in the quickest time with the least amount of hassle.
The perception is that direct insurance is cheaper but that’s not quite how it works. What aggregators do is give you the ability to compare the prices of different brands of the same product and pick the cheapest.
What a broker does is take on part of your risk by accurately assessing it, thereby reducing the risk for the insurer. That reduces the cost of the policy. They also have access to underwriters who can provide competitive pricing.
If you’re in the market for a single off the shelf product and your needs are very straightforward going direct could work for you. But if you have both domestic and business requirements, for example, or, like most people, have difficulty in understanding what different policies will and won’t cover and under what circumstances, then it’s best to get an insurance broker on your side.
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