Insurance options

[rocko]

Can people please enlighten me on the following. When I request an insurance quote from EBN, Honan, etc, it includes a brokerage fee, because the insurance is underwritten by a third party - an insurance firm. Wouldn't it thus cost less to buy the same product by dealing directly with the insurance firm who will be insuring the property? eg Allianz, QBE, etc. However I don't get the impression that insured parties do this.
Thanks for any forthcoming responses.

 

[Scott No Mates]

Many brokers deal with reinsurers ie wholesalers. By doing this, they achieve a rate better than retail rates even after you add back their brokerage fees.

 

[brettc]

Can people please enlighten me on the following. When I request an insurance quote from EBN, Honan, etc, it includes a brokerage fee, because the insurance is underwritten by a third party - an insurance firm. Wouldn't it thus cost less to buy the same product by dealing directly with the insurance firm who will be insuring the property? eg Allianz, QBE, etc. However I don't get the impression that insured parties do this.
Thanks for any forthcoming responses.

In our case with the RentCover products we (EBM) actually developed and "own" the product, QBE is simply the underwriter. You cannot physically get RentCover directly from QBE. This doesn't mean you are necessarily paying more than if you could get a comparable product directly from an Insurer, as there are all sorts of economies built in and a whole lot of negotiation done on the part of the broker to keep premiums down.

Even with other types of insurance that may be available directly with an Insurer you then need to consider the benefits gained by going through a broker anyway, which includes the assistance with claims, ensuring the cover is right for you etc.

 

[rocko]

Thanks for your explanations.
Brett, you have said that a broker can assist with any claims. How is this possible when the cover summary states, in the case of EBM, that in settling any claims EBM is an agent of the insurer, and not of the insured?
To assist the insured party would surely be a conflict of interest as well as legally not possible?

 

[brettc]

Thanks for your explanations.
Brett, you have said that a broker can assist with any claims. How is this possible when the cover summary states, in the case of EBM, that in settling any claims EBM is an agent of the insurer, and not of the insured?
To assist the insured party would surely be a conflict of interest as well as legally not possible?

Hi Rocko

As I mentioned, with other types of insurance, the normal role of the broker is to assist with claims etc. What you're referring to is the case with RentCover because we have a binder arrangement, the plus side being that we have claim settling authority allowing us to settle claims up to $25,000 on behalf of the insurer. This speeds up claims immeasurably. As you mentioned though it means that with this type of product (under a binder) claims are technically "settled on behalf of the insurer".

In saying that, we still aim to ensure clients are getting what they're entitled to out of every claim, you would only have to speak to the property managers we deal with who have multiple claims as testimony to that. So we will certainly still assist with claims even under the binder, but we expect to ensure you get what you're entitled to, no more and no less.