“Sometimes going direct to an insurer can be cheaper but in many cases motorists will get a lower price by going through a broker – particularly where they don’t perfectly match the big insurance companies’ target customers of Mr and Mrs, 40-year-olds, with full no-claims bonuses, no penalty points and driving a VW Golf,” said Brian McNelis, director with the Irish Brokers Association (IBA).
“A huge proportion of motorists will end up paying more if they don’t ask a broker to price their insurance for them. Also, should you need to make a claim, you need an independent person such as your broker to advise you on what you’re entitled to. Relying on an insurer to show you the small print that could make a big difference in the outcome of your claim seems somewhat illogical.”
McNelis, however, also said there is fierce price competition in the direct-insurance market (where consumers buy their insurance directly from an insurer instead of from a broker). “It can be hard for brokers to compete with direct Irish insurers [on price] – unless they go outside the country to a non-direct insurer,” said McNelis.
Commissions also come into play. Car-insurance brokers typically earn commissions of between 5pc and 10pc, according to the IBA. A discussion paper published by the Central Bank last June found that motor insurance brokers typically earn between 7.5pc and 10pc commission. Furthermore, “better rates of commission have been negotiated individually by some brokers and the Central Bank also observed some profit-share arrangements between general insurers and some larger intermediaries”, said the paper.
It is always worth contacting different insurers and brokers to see if you can get a better deal on your car insurance – particularly if you’re facing a steep price increase. Be sure to highlight your claims-free history (if you have one) when shopping around – some insurers offer a bigger no-claims bonus than five years so you may get a better discount if you have not made a claim for the last seven or more years.
By Louise McBride
See full story at www.independent.ie