New Zealand Insurance Companies
Who should I buy house, contents and car insurance from?
There are two main ways to purchase house, contents and car insurance in New Zealand – directly through an insurer, or through an insurance intermediary.
Direct insurers are just that. They deal directly with the public, with no ‘middle-men’, go-betweens or intermediaries.
AA Insurance is a direct-to-the-public insurer. As we are jointly owned by the NZ Automobile Association (and Suncorp) customers are able to buy and update their insurance with us through the national network of AA Centres, online, or over the phone.
Contacting an insurance company directly is generally the fastest way to get a response to your queries. It also allows you to personally go through the quote with an experienced consultant, who in most cases, like those at AA Insurance, are also Qualified Financial Entity Advisors. They specialise in the policies of only one insurer. The consultant can clearly discuss all your options, recommend the best policy for your needs, and immediately answer any questions you may have. And if the insurer underwrites its own polices, like AA Insurance does, then you will receive a quick response as to what they will be able to cover, and your policy can proceed swiftly.
This initial interaction with a direct insurer will also give you an insight into the way the company operates. It can help you determine whether this is the insurance company you want to give your business to, and if you are confident they will help you should you need to make a claim.
At AA Insurance you can purchase all your home, contents and car insurance online, or you can start out with a quote and then give our consultants a call to start a policy. Whether you go to an intermediary or a direct insurer, you will need to allow time for the quoting process, especially if you are considering more than one quote. With a direct insurer it takes 10-15 minutes on average, for consultation to take a customer through one quote, baring in mind the customer has all the details of the property at their fingertips.
So, as you can see there are several different ways to take out home, contents and vehicle insurance in New Zealand. As with all important decisions, it’s a good idea to take the time to consider your own circumstances before decided on the best option for getting your insurance needs sorted.
An insurance intermediary arranges insurance for their customers by negotiating and securing an insurance contract with an insurer. Intermediaries include insurance brokers, who are not employed by an insurer, and employees or agents for an insurer such as banks.
Brokers are independent insurance advisors, who do not work for an insurance company. The broker is able to look at different policy options from a wide range of insurers, and offer advice based on the price of policies, policy benefits and company reputation to best meet the needs of their customers. It’s important to note that not all insurers are represented by brokers. For example AA Insurance prefers to be a direct insurer so we can achieve the best policy possible for our customers.
Once a customer has decided on the insurance that works for them, the broker will arrange the insurance cover on their behalf. The broker will receive a commission for each quote, and may also charge a broker fee on top of the policy premium being charged by the insurance company.
Employing a broker works well for those who are time conscious and don’t want to go through a number of insurance quotes, yet want insurance tailored to their specific needs.
An agent, such as a bank, offers a similar service to a broker but will only offer policies from the insurance company they are associated with.
In return for policies sold the agent receives a payment directly from the insurance company. However, unlike a broker, an agent does not add commission or a fee onto the price of the customer’s policy.
Banks most often discuss insurance with a customer when they take out a mortgage. Some people prefer to keep their finances together, which is why they opt to get insurance from their bank. While most banks offer insurance, the policies are usually underwritten (specific terms and conditions of your policy) by the appointed insurance company. This means that in most cases your insurance will be branded as bank product but actually provided by an insurance company. Depending on what may need to be reviewed, your policy may take some time for approval as it needs to be underwritten by the insurance company.
Buying insurance through an agent works well for those taking out a mortgage, and who like the convenience of keeping their finances together.