Unless you work in insurance, the benefits of using a broker over going to insurers direct or using a comparison site aren’t necessarily clear. Here, we explore some of the differences between these options and invite you to contact us if you have any questions.
Online insurance has become more of a commodity style business over the last 15-20 years, with more and more direct markets offering premiums that can sometimes appear too good to be true. Insurance should be a purchase where “value for money” comes in higher on the list of priorities than simply the cheapest premium possible.
McClarrons is a general insurance broker – this means we broke all kinds of general insurance risks, although we do not get involved with financial services, such as life insurance. As a broker, we gather all of the necessary information from you about the risk and present it to a panel of suitable specialist insurers. We negotiate with them on cover and premium, before presenting you with the best options and making recommendations.
And this is where the differences between a broker and an online provider start to show.
We advise our clients. We prefer to meet with clients face to face, as we find that this leads to a more in-depth discussion about your requirements and allows us to get to know what’s important to you. Whilst we are not valuers or surveyors, our years of experience in the industry mean that we are able to give an opinion on the accuracy of sums insured of general contents and rebuild values, for example. As soon as we realise that specialist assistance is required, we have an entire network of trusted independent valuers, surveyors and security specialists who will assist.
More often than not, online providers do not provide advice. What does this mean in reality? Well, when you go online for a quote, the onus is 100% on you to ensure that the information you have provided is accurate and correct. And if it isn’t and you are unfortunate enough to have to make a claim, you could find your claim being turned down or your settlement reduced – regardless of whether the error was accidental or on purpose. This is why a specialist insurance advisor can be of great value to you.
How about pricing structure? There is a common strategy among online providers to price their quotes to lose money for the first two years; after this time, the prices start going up. Why is this? A lot of us are too busy to search around every year for new insurance quotations so once we have satisfied ourselves that the price is reasonable, for example after the second year’s renewal, we just let it renew year after year and don’t always realise that the price is slowly increasing.
Our pricing is open, transparent and clear. We never artificially lower premiums to attract new clients. We negotiate hard on your behalf to secure the best option available from the outset. We believe that value for money is far more important than simply getting the cheapest premium. After all, it is unlikely that the cheapest premium will offer you the best cover. At the same time, there is little point in paying way over the odds for cover which is just not important to you. We take time to understand what matters most to you and your lifestyle so we can make an appropriate recommendation in respect of both cover and premium.
Finally, we should discuss claims as this is the primary reason most of us purchase insurance – so in our hour of need, our insurance providers will step up and help put us back in the position we were in immediately before the claim.
How do most direct/online markets handle claims? The first thing to consider is that you will most likely be dealing directly with the insurer or with a claims management company. Household claims can be fairly straightforward to resolve, assuming all of the information stacks up. However, there can be complications. For example, most online policies replace clothes on a “wear and tear” basis, whereby they will only offer you a proportion of the value for lost/ damaged clothing as the items were not new when the claim occurred. In reality, you will want to go and purchase brand new clothes to replace those lost so you will inevitably be out of pocket. Such complications will require you to negotiate with insurers yourself, causing you hassle and precious time spent on the phone trying to resolve it. Direct insurers may also try to minimise the amount they have to pay for claims and could look to repudiate a claim if the policy wording hasn’t been followed to the letter.
McClarrons are somewhat unusual in the world of today’s insurance brokers – we have an in-house claims management team. This team is solely dedicated to working on behalf of our clients to ensure speedy and favourable results for their claims. Imagine the peace of mind and relief of having a professional on your side, fighting your corner – you can happily get on with other things, whilst we are advocating you at every available opportunity.
There are plenty of other differences between online/direct and broker-led insurance policies, but these are our top 3. Consider the importance of an advice-led service and how useful it would be to have the might of a claims team behind you – it shouldn’t be all about premium!
For a complimentary review or to discuss your insurance requirements, contact us at firstname.lastname@example.org or on 01653 697055.
Author: Robin Nathan, Art & Private Client Account Executive
Tel: 07557 562868