Is online insurance
Having more than one product with your insurance company will also lower your premiums. In my case, only my car is insured through the direct insurance provider, while my house and household contents are insured through the insurance broker, hence a further discount on premiums.
Coutts explains that insurance companies reward you for having more insurance with them, because it lowers the overall risk and increases the levels of retention.
So, if the real pricing difference has less to do with the channel I am purchasing insurance through and more to do with my risk profile and number of policies, which distribution channel works best?
For individuals who want to be able to go online and insure their car and have no need for a broker relationship, online insurance definitely fills a space.
I have household insurance and a two-car family (which will soon become a three-car family when my son starts driving), so, all things being equal, I prefer the broker model, especially when it comes to the claims process.
One of the advantages of a commission-based structure is that the broker is paid on an ongoing basis to service the client. It is in their interest to ensure that the company pays out if I have a claim, because an unhappy client moves on.
A large insurance brokerage has a lot more clout with an insurer than I would as a single client, so it is more likely that my claim would be processed and, best of all, it means I don’t have to deal with a call centre any more.
Number of policies affects premiums