There have been numerous destructive weather events around the country this year, and this has once again put the spotlight on the insurance industry. While the media has criticised some insurers for their slow response and lack of care, there is one thing that many policyholders are thankful for – their broker.
Many consumers perceive a broker as “the middleman,” and an unnecessary third party in the insurance scheme. This is mainly because consumers believe brokerage adds unnecessary cost. Here are four important factors to consider when purchasing an insurance policy and how they differ when purchased from a broker or from an insurer directly:
Brokers have access to policies from a number of different insurers and can often access special pricing due to their purchasing power with the insurance companies. Brokers are professionally trained and are able to guide you through the process to help determine if you may be over or under insured.
Brokers are able to help you through the process of choosing an insurance policy. Often you will deal with a dedicated account manager who is your main personal contact should you have any queries or claims throughout the year. When dealing directly with an insurer, this form of contact is normally substituted with a call centre.
3. Peace of mind
Brokers have the ability to compare insurance policies and provide advice on how you should insure your assets. Doing this reduces the risk of any unexpected surprises at claim time. Direct insurers obviously understand their own policies quite well but they are not able to offer an alternative should their policy be restrictive. This means that you will need to read and compare the Product Disclosure Statement for each insurer; a potentially long and tedious process.
4. Claim negotiation
Insurance brokers understand policy wordings and how they should be interpreted, often to a better degree than the actual claims staff at an insurance company. Crowe Horwath General Insurance Associate Principal Tracy Donaldson is quoted saying that, “In the last two years we have seen the insurers tighten their claims area to ensure each payout is 100% justified. Sometimes this means knocking back claims that should be paid. This is where we provide value for the client and fight on their behalf.” If you deal direct with an insurer you are on your own.
As a client of Crowe Horwath, you have access to a team of skilled insurance brokers. For assistance with reviewing an existing policy or securing a new policy, speak to one of our insurance brokers today.
By Nigel Sullivan
Partner – General Insurance