Tips from an Insurance Broker
Property expert Alex Goldstein has some indispensable tips from an insurance broker. He talks to specialist Ian Darnbrook of A1 Insurers and gains an insight into the world of home insurance. We find out exactly what an insurance broker is, and the expensive pitfalls some people experience when they do it themselves online. We hear about the perils of fronting, and also hear of some quirky requests for insurance, such as a military tank and a letter from Lord Nelson.
Tips from an Insurance Broker
Full transcript below:
Alex: It’s a pleasure to welcome in Ian Darnbrook in the studio today and just to really try to get to grips with dare I say, the insurance industry. Now Ian just talk us through exactly what does an insurance broker do. You hear the term getting thrown around, but I don’t know whether anyone really understands it?
Ian: Right, an insurance broker, we go out there to find the right policy to suit your needs. We deal with over 100 different insurers, so we go to each insurer to find the best policy for you.
Alex: And how do you actually get paid? Am I paying you up front as a search type service? How does it work?
Ian: The premium we quote to you includes a commission we get from the insurance company so the price we quote you is what you pay.
Alex: Sounds an obvious question but for what sort of things do you actually insure at the end of the day?
Ian: We insure most things your house, your cars, collections of cars, businesses, letting properties.
Alex: I dare say it’s the age-old question, why don’t I go on one of those fancy websites money meerkat as they say and go and get a quote, what are the pros and cons of going down that route?
Ian: You can do that, they can be cheaper, you’ve got to watch out for policy conditions and assumptions that they make when you’re doing quotes. If you get it wrong that’s your problem. We check the policy cover to make sure you’re getting the right cover, if you’re doing it yourself you may miss something, that could be higher excesses, we’ve had occasions where they’ve excluded flood cover and we’ve had people who have insured vehicles and have had no theft cover because they haven’t had the right security on the vehicle.
Alex: I guess in those situations the insurer completely backs out and says that’s not my problem and you personally have to settle it?
Alex: And from a insurance quotation point of view, with your experience what are the pitfalls a lot of people can inadvertently fall into and then I suppose live to regret it?
Ian: Probably the main one on household insurance is not insuring the property for rebuild cost. A lot of people will go for the sale value which is incorrect, it should be based on the cost to rebuild, on your contents, what it would cost to replace your contents.
Alex: And just talk everyone through this, rebuild value, what is it and how can you specifically define it because obviously you don’t get paying more than the rebuild or obviously less.
Ian: Normally if you have a survey done by a mortgage company they will give you a rebuild cost, or you can go to a surveyors and they will give you a rebuild cost. There are a lot of policies out there that are bedroom rated and they give you a certain sum insured. For example, AXA Extra they give you up to a million-pound sum insured so if you’ve got a three-bedroomed semi in Harrogate obviously a million pound is more than enough to rebuild that house.
Alex: Are you not then inadvertently overpaying if they’ve got a policy that values you up to a million, but your property is only worth 500 thousand?
Ian: No, I mean you’re not overpaying because its rated on the number of bedrooms, so you could have the same policy for a five-bedroomed house and because they’ve got five bedrooms they will pay a higher premium.
Alex: I’ve got you, and how does it work I suppose conversely on the car insurance side of things I suppose the age old thing especially when your children are growing up, they get in the car and driving licence, and people, don’t know, I suppose this old school mentality try to slightly fudge the issue and get the kids in under the parents car insurance but actually its their sons car and he’s actually driving it. How do you actually work through that sort of you ought to potentially?
Ian: You have to be very careful, insurance companies call that fronting, basically buying the son or daughter a car insuring in the parent’s name, knowing the son or daughter is the main user. Most insurance that we deal with now, they’ll pick that up and know there’s a problem. Whilst young drivers are learning to drive premiums are not too bad, its when they’ve passed the test and they go to get the first car, you could be looking at premiums in excess of £3,000.
Alex: Gosh, and is there any way around that whereby if you put extra people on the policy, is there anything sensible you can do?
Ian: Sometimes if you put the parents on it reduces the cost a little bit. There is a lot of people out there doing telematics which is little black box in the car which does make a difference. Unfortunately, at the moment we have no insurers that can offer that it’s usually only available direct.
Alex: Got it, and what’s the most unusual items that you’ve insured? You’ve been round the block quite a lot, with all due respect and I bet there’s been some interesting items floated your way?
Ian: Yeah, we did insure a tank which was on a vintage policy. We’ve also got a client who’s got a collection of naval memorabilia which includes a letter signed by Lord Nelson.
Alex: And how do you actually value property, obviously go to a specialist?
Ian: Yeah, he got a specialist valuation company for that one. I think it was in the region of £25,000.
Alex: So, if anyone has got a tank on their driveway on indeed a letter from Lord Nelson or indeed a need for straight forward house and contents insurance what’s the best way to reach you guys?
Ian: Best way is to give us a call on 01937 581417 or you can email us which is, best email address is probably email@example.com
Alex: Fantastic Ian, a great insight and some really useful information. Thank so much for coming on.
Ian: Thank you.