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FIA: Direct insurance may not be worth it

Wednesday, 26 August 2009 08:26

According to Vice President of Financial Intermediaries Association, Seamus Casserly, you may not always get what you pay for when it comes to direct insurance. The cost and time saving techniques of direct insurers may not mean better coverage.

Casserly recommends investigating both direct insurance and agents and warns customers not to be fooled by seemingly efficient quoting processes. He advises clients to compare the same cover from a number of different insurers. Often insurers will offer a slightly different product which makes it impossible to compare quotes.

He also advises those looking for insurance to compare not only price, but the insurers’ reputations, efficiency, claims process and so on.

Direct insurers give customers the impression that they’re saving agents’ commission fees, but they have to pay for call centre staff, advertising and cover other costs that are factored into the amount customers pay, which may make this saving merely illusory.

The best thing to do when buying insurance is compare the entire package - taking into account excess, premiums, agents’ commission. An agent may be worth the cost as they help you find the cover that suits you, give you personal attention, assist with negotiating terms of a contract and help during claims.

Clients may still find, however, that direct insurers offer more competitive quotes and that one can reduce the amount payed monthly through a number of cost-cutting techniques. It’s worth the while to compare all insurers before signing any dotted line.

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