I’ll bet that if you've been listening to the radio, watched TV, been on TradeMe, or been in traffic today, you will have seen some form of advertisement for insurance from at least one insurance company - and probably before lunchtime!
There are just so many, and they all want your business... but how do you choose the right company for you? And what level of cover you need?
Not all insurance companies and insurance products are created equal, either - so, unless you do your homework thoroughly before starting an insurance policy, you may be in for a fright when it comes to making a claim.
My own insurance horror story
I personally had an experience when I was younger - and before I got into the financial advice industry - when I purchased my first car from a vehicle dealer. I was sold car insurance by the car dealership and I was happy that the car was insured. However I had a situation where I needed to make a claim on the policy, only to be told that the insurer had shut up shop and that my claim was not accepted! So effectively the money I spent on the insurance policy was wasted, and worse than that, I had to find money that I didn’t have to pay for the repairs to the vehicle itself, which should have been covered by insurance!
So the reliability of the insurance company is very important. How strong are they financially, and will they be around and able to pay if you ever needed to make a claim?
A recent major example of this risk was during the time of the Christchurch earthquakes in 2011. A major New Zealand Insurer, AMI, was in a position where they had so many people claiming for damage to their property, that they were nearly unable to pay for all the claims. In fact, the New Zealand Government had to prop them up with additional taxpayer funds.
When you contact a provider, their staff are generally well-trained and pleasant to deal with, so you may feel comfortable to take out a policy on the spot. But it really does pay to shop around! If you don't shop around, you could be paying too much.
Shopping around not only takes time and energy, but involves a learning curve as you come to terms with insurance terminology. And to add to the confusion, insurance companies often have different names for the same thing!
Using an Insurance Broker will not only save you huge amounts of time (and energy), it will likely also save you money. An Insurance Broker will do all the 'shopping around' for you, and present you with the best deals and the best cover for your situation, from the best insurers. An Insurance Broker (like me!) will meet with you at a time and place that suits you (I can even come to you - anywhere in Tauranga or surrounds). They'll spend time understanding your needs, budget and situation and be able to recommend the right types and levels of cover to suit your situation. An Insurance Broker will also be able to explain all the industry terminology in plain English, and break down what each of the insurance companies are really offering you - all the features, caveats and fine print.
And best of all, there are no fees associated with using an Insurance Broker! It's free! Brokers are paid commission from the insurers themselves.
And - and this is important - a good Insurance Broker will be there to help you in the event you need to make a claim on the policy, rather than you being left to your own devices.
Some Insurance Brokers are independent, meaning they use multiple companies. Others are Tied Advisers, meaning they represent one company. I am an independent Insurance Broker, and through WealthHealth I work with up to 5 different providers. I’ve done the homework on the companies and their products, so you don’t have to spend your time and energy trying to understand them all yourself.
Insurance is a cornerstone of any Personal Financial Plan, so when you choose WealthHealth as your Insurance Broker, we'll give you a full Personalised Financial Plan (valued at up to $2,000+GST), at no charge! Contact me and let's chat about your insurances.