Driven around the bend by direct approach
Brokers have the expertise to secure the best motor insurance deal for their clients, writes Ciaran Phelan
ANYONE who has taken out motor insurance will be aware of the huge variation in quotes given by providers.
With rising insurance premiums, consumers are generally more active in reviewing the cost of motor insurance, and rightly so.
And if you consider that the typical family shells out between €800 and €1,100 on two cars, savings of €200-plus a year are easily attainable following a simple re-pricing of the market.
Many consumers are unaware of the savings that can be made by shopping around for car insurance.
As figures from both the Financial Regulator and our own study show, there can be significant variances in quotes from the different providers for individuals with the exact same profile.
Simply asking an insurance broker to search for the best deal can often result in a person saving a significant amount of money.
According to research that the Irish Brokers' Association (IBA) conducted late last year, going directly to motor insurers for your car insurance is very rarely cheaper than going through a broker.
This conclusion was derived from a comparative analysis of the latest Financial Regulator survey of the car insurance market.
When results from both our own and the Financial Regulator's car insurance survey were contrasted, it was found that in 14 out of the 16 sample cases the quotes received from brokers, in relation to car insurance, were cheaper than those which came directly from the insurers themselves.
The Financial Regulator survey, in contrast, only looks at the quotes offered directly by insurers.
The study itself consisted of four different consumer profiles, along with quotes from eight insurance providers and one from an IBA broker.
The study (see graphic) was further broken down into four different quotes for each profile:
- Male comprehensive.
- Female comprehensive.
- Male third-party fire and theft.
- Female third-party fire and theft.
Several interesting results were thrown up by the study.
For example, there was a differential of a staggering €1,628 in the quote from an insurance provider and that from a broker for a 22-year-old male driver of a Nissan Almera.
And the best price for a 22-year-old female student came from Quinn Direct, but this was still €284 higher than the IBA broker achieved.
Anecdotal evidence has also suggested that the insurance market is tightening in terms of paying out on claims, so it is also worth considering that using a broker also has the added benefit of expertise and experience in the event of a claim.
We are seeing more people seeking broker advice on entitlements and help in dealing with insurance companies in the event of a claim.
What many consumers do not realise and what we feel it is important to communicate to them is that there are deals available to brokers in relation to car insurance premiums which consumers simply cannot get by going direct.
In addition, the lowest price may not always be in every policy holder's best interest.
People need to make sure they have the level of cover that suits their individual situation.
Brokers will not only find you a better deal or at least match a quote from an insurance company.
They will also research the market for you and save you having to call or visit the website of each insurance provider to compare quotes and policy types.
Ciaran Phelan is chief executive officer of the Irish Brokers' Association