ASK THE EXPERTS

RITCHIE SHERRET OF HENDRICKS INSURANCE

AM I PAYING TOO MUCH FOR MY INSURANCE?

ANSWER: Insurance premiums are seen as a necessary evil by just about everyone who pays them – the renewal premium comes in and it just keeps on going up. However, if this is your experience there are ways of mitigating the premiums, or at the very least, ensuring you are getting value for money.

At Hendricks, we broker some of the country’s largest farms, estates and castles and we believe there are several ways of ensuring that you are paying a competitive premium.

Firstly, ask your broker to manage your insurances on an agreed professional fee in lieu of any hidden commissions. Most insurance brokers do not operate on this basis and simply receive a percentage of your premium by way of a commission payment from your insurer – some as much as 30%. In doing so, they are immediately conflicted because the more your premium increases, the more their earnings increase. By agreeing a professional fee in advance and excluding commission, it removes this conflict and the broker’s sole interest becomes making sure you get the best value for money.

Secondly, tender your insurances at least every three years. By doing so, you can establish if your existing broker remains competitive. When tendering, however, do not use more than your incumbent broker and two others. If you use more, you will pollute the market and receiving underwriters will most likely not wish to compete for fear of not winning the business. In addition, ensure all insurer recipients of your tender document are supplied with identical information, this avoids confusion and saves time for you.

Finally, knowledge is power. Saving premiums is important but not at the cost of cutting your cover. A good broker should present you with a menu of costs for your different risks and covers, and you can then make an informed decision as to what cover versus costs you deem important or appropriate for you.