IZ_Use an insurance broker or go direct?

There’s nothing wrong with going direct for your insurance, it’s like getting takeout for the family and everyone’s happy with fried chicken. But if the kids want chicken, you’re doing low carb and your spouse wants a burger, you may have a problem. Sometimes your needs are just more complicated than what a one-stop-shop can offer. This is where insurance brokers come in and can actually save you money by crafting insurance that fits your needs, instead of trying to fit your needs into the insurance options commonly available.

Going direct may be for you if:

  • You have simple, uncomplicated, and straightforward needs where you only need basic advice. Simple needs don’t mean you aren’t paying a lot for your insurance, but simple needs mean simple insurance will suffice.
  • You are knowledgeable enough to know what you need and are capable and willing to take the time to go through the policy wording to make sure you fully understand all the Ts and Cs and what you’re signing up for.
  • You’re fine dealing with a call centre when you need help, need to claim, or have any questions.

Going through an insurance broker may be best for you if:

  • You have more complex, technical needs that require a high level of advice.
  • You aren’t 100% sure what kind of cover you need, for example, when it comes to your business. On a commercial policy you may get basic cover, however, there are specialist extensions only brokers know about that can have a serious impact on your policy − especially at the claims stage.
  • You don’t have the time or don’t want to shop around to find insurance that fits your needs, and you don’t have the time to read through and understand all the fine print and policy wording of a variety of insurance options.
  • You don’t want to deal with a call centre, you want personalised one-on-one service from someone who knows you and will develop a professional relationship with you in managing your risk and needs over time – someone who looks out for you, especially when it comes to claims.

It’s important to know that neither option is wrong – what’s best for you really depends on your needs. However, brokers are knowledgeable and licensed professionals who understand all the products available on the market. Take the following example: you own a business that manufactures parts for the motor industry. Most basic commercial policies will cover common risks and losses on a generalised level, so you could go direct. However, this could leave you open to industry-specific liabilities that your standard commercial policy wouldn’t cover. Standard policy means standard cover. A professional broker has the experience and knowledge to recognise the liabilities specific to your business and will advise you on how to cover these, for example, various intangible liability risks, product recall risks, specialised manufacturing machinery breakdown risks and distribution of product risks, which need to be transferred appropriately through brokers into specialised insurance markets. A broker can also assist with risk management within a manufacturing environment.

The benefit of a broker is that where an agent works for a specific insurer and can only advise and sell you on what their company is offering, brokers work for themselves and will find what works for you, and where more complex needs are involved, this could mean insuring your assets with various insurers or even getting specialised policies crafted for you. Meanwhile, you will still only deal with one broker, regardless of how many insurers are involved.

Having a one-on-one relationship with a broker also has benefits when it comes to maintaining and servicing your policy, annual renewals and updating your cover with elements you may not have even thought of. Developing a relationship with your broker means that your policy and cover will evolve with you, your business, and your family. Claims are also handled by your broker, who will help you sort things out from beginning to end. All of this translates to money, time and effort saved.

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