Why would you go direct?

Paul Davies | February 16, 2017

Direct insurance companies are now in the mainstream media every waking moment of daytime television. I'm sure you've seen the meerkat or the loud sales guy interviewing the lovely sales presenter reading from their scripts. 

I have seen the numbers, and they do a lot of business from these advertisements. Their goal is to saturate the media with a single message, and play the numbers game. So why would personal insurance brokers exist if you can simply phone the 1800 number on the screen and get it done there and then?

The main answer is 'Claim Time'. What happens when you purchase something online or over the phone is that many times the 'underwriting' (or questions they ask about your health and medical history) is done at claim time. So what? 

Well, if all those medical questions were answered at time of application, the insurer knows what they're getting themselves into, so they will tell you straight up whether they are going to insurer you or not. Where as with some direct insurers, this is done at claim time after you've paid your premiums and 'expecting' them to pay out. The general word they use is 'pre-existing condition' meaning anything you suffered prior to signing up was excluded. This is generally in that disclosure statement they read fast over the phone or the box you just ticked.

You can't be expected to know everything, but small things like when you had that skin cancer you had checked 5 years ago that turned out to be nothing. But if you suffer a form of cancer and want to claim, direct insurers may not pay a claim.

Do yourself a favour if you get those quotes from an online insurer or the television, ask a broker who specialises in that area and get them to give their opinion and give you some other quotes and options. It doesn't cost anything for the quotes.