Trust comes with transparency. In general insurance businesses, the level of transparency is low. The level of trust seems to have declined over the years.
Many company owners now wonder what value they get from their business insurance brokers or adviser in Auckland, Wellington, Christchurch and across New Zealand.
Let’s look at three areas for explanation. Then we’ll look at see how small business owners can respond.
Where Are My Three Quotes?
It’s sensible business practice to get three quotes when buying goods and services. Business insurance for property damage or public liability should be no different.
So, when was the last time your business insurance broker gave you three commercial insurance quotes from different insurers? Why don't they?
Most Auckland insurance brokers have a preferred insurer arrangement in place for getting a company insurance quote for their customers. It means they will place most of their commercial business insurance quotes with that preferred insurer. They do so in order to earn higher commission.
Getting quotes for business and liability insurance from additional insurers will reduce the volume of policies they can place with their preferred insurer. It will also require additional effort, eating into their income and profit margin. That's not in the best interests of your business insurance advisor.
When your Hamilton insurance brokers have a preferred insurer arrangement in place, they act as agent for the insurer. They are not acting as a broker for you. At this stage, you may be better off going direct and getting your own business insurance quotes online.
Why Is My Broker Not Providing Insurance Advice?
Small business owners say they engage a business insurance broker in Auckland to receive insurance advice. They want advice on managing risk and finding the right small business insurance product for them. Christchurch insurance brokers say that business owners should engage them to get advice about risk and insurance. The reality is that few small business owners receive insurance services advice. Why?
As we have seen above, almost any small business insurance adviser NZ wide has a preferred insurer arrangement in place with an insurance company. Any advice they give that leads them to recommend a different insurer will conflict with their preferred insurer arrangement. Besides, advice takes time and costs money, eating into your insurance broker’s profit margin.
When selecting a Christchurch insurance broker, ask if they have a preferred insurer arrangement in place. If they have, you may be better off getting your own business insurance quote online.
How Much Commission Do They Keep?
NZ insurance brokers are paid commission. The commission they are paid is deducted from the insurance premiums paid by you. The higher the commission, the higher the premium.
NZ law and regulations do not require insurance brokers to voluntarily disclose how much commission they are paid. However, insurance customers do have the right to ask. When asked, insurance brokers are required to disclose their commission.
For small business insurance, you will find that NZ insurance brokers and agents are paid between 20% and 30% of the premium. Most brokers add their own fee on top of any commercial insurance quote to you.
Get a Business Insurance NZ Online Quote
If you really want a better deal on insurance quotes NZ wide, you need to take a step. The best step you can take is to get a quote for business insurance online.
You can get three quotes in under ten minutes. Cover is instant and available 24 hours a day every day.
Please note: Insure Online is not associated with Steadfast, NZ Brokers, Rothbury or Crombie Lockwood. We are an independent insurance broking business.