Buying insurance can be a daunting task. From the principles that underpin insurance contracts to the warranties and responsibilities placed on policyholders, insurance can be the cause of much anxiety to you rather than the “peace of mind” it is intended to provide.

Direct insurers tend to convey insurance products as a simple “one-size-fits-all” commodity. They try to convince you that the DIY approach will save you money. But you need to guard against being wooed by price and marketing gimmicks such as cash-back bonuses. All too often, the gimmicks are simply policy conditions in disguise, designed to protect the Insurer against the often frequent smaller claims. The famous “cash back if you do not claim after 3 years” is, in reality, just another excess applicable to the entire policy and a potentially sizeable excess at that.

Then there is the issue of advice. Direct insurers conduct their business via call centres. Agents follow scripted communications. All well and good, but this is not advice. It is simply the Insurer telling the client what the requirements are in order to buy a policy. It is up to you to then decide whether you can meet these requirements or not. It’s a case of “if the shoe fits, wear it”. Poor advice may reduce the value of the policy to a mere token purchase with little real value. The proof of the pudding comes when claims are made against that policy.

It is not necessarily a service issue either. Many direct insurers offer sparkling service at claims stage. The reality though is that direct insurers will seldom pay out more than three or four claims to a policyholder before things start to go pear-shaped. It’s interesting to note that approximately 70% of all claims that get referred to the Ombudsman for Short-Term Insurance emanate from the Direct Insurance market. It is this reality that is preventing the direct insurers from growing their client bases despite spending huge budgets on “in-your-face” advertising. Premiums quoted by direct insurers are often highly competitive initially but are soon increased, regardless of whether or not you have claimed.

So what, then, is the value of a good broker?

As brokers we treasure the relationship we have with our clients. Yes, IT systems dictate that our clients have numbers but anonymity ends right there. We want to get to know our clients on a personal level. We pride ourselves on our ability to create bespoke insurance solutions that best meet your needs. When you claim, you will have a trusted partner you can confide in and who will guide you through the process.

It is easy to reduce a premium by increasing an excess, but is it the right thing to do?

Not necessarily. We understand that a large excess at claims stage may place the policyholder in a predicament. As your broker we are there for you at claims stage as much as we are when arranging the policy. While we strive to offer competitive premiums, we are not in the business of selling policies at the cheapest price. We provide the right advice and match it with the right policy at the right price. And, if on that rare occasion, things do go wrong, we will be right there batting for you.