What is that cheap insurance really costing you?

These days, buying insurance CAN be like purchasing a snack from a vending machine with all kinds of global big brands offering cheap, fast, direct-to-market policies.

The BIG question you need to ask yourself when presented with these ‘fast food’ options is: Why are they cheaper?

And new research on consumer behaviour shows many people are doing just that AND deciding that cheaper is NOT always better.

Make no mistake, for some people, in some circumstances, these cheap (often online or over-the-phone) policies will do just fine. And who wouldn’t want to save a few dollars each year on their insurance bill?

We want to make sure when you accept that policy, you understand WHY it is cheaper. The ANSWER is usually because of additional exclusions and reduced customer service.

So when comparing a more expensive policy with a cheaper version, make sure you are comparing apples with apples.

Ask yourself exactly what you are covered for. Under what circumstances would I not be covered?

If I had to make a claim, would I want help from an expert broker used to dealing with these situations or would I be happy to navigate the paperwork myself?

Online news source insuranceNEWS.com.au reported many new entrants to the insurance market offering lower-cost products were having trouble retaining customers.

In other words, consumers were purchasing the cheaper option, but quickly realising it didn’t suit their needs and deciding against renewal after the first 12 months.

A spokesman from Allianz said many consumers had come to realise there was more to the overall value proposition of insurance than price.

“The survey indicates that for home insurance, the customers of some smaller, newer insurers are less likely to renew a policy with their insurer than the customers of larger, more established insurers.”

If you need help comparing policies, phone us at MGIB. We’re happy to help.