FIA Dispels Direct Insurance Myths

August 25 - While the temptation is there to take out direct insurance by phone or over the internet, thus saving time and costs, there is a risk that you are not always getting what you bargained for.

So says, the Vice President of the Financial Intermediaries Association (FIA), Seamus Casserly.

Casserly noted that while direct insurance may seem cheaper and faster at first glance, this may not always be the case and consumers should take some time out to compare what type of cover they could get through brokers before signing on the dotted line.

"When comparing the costs of buying insurance directly through a call centre or via an intermediary, make sure you are comparing like for like products," said Casserly. "This is a decision you should not make on price alone and so make sure you also take quality into account."

While you may think you're earning the commission that the direct insurance company saves that they would traditionally pay brokers, Casserly explains that this may turn out to be a myth.

Direct insurance groups also need to pay their staff, call centre fees and administration costs, and all these are factored into the price they charge their customers for insurance policies.

"If you analyze all the different costs involved, you will find that it is more likely cheaper to buy your insurance through an intermediary," said Casserly. "Compare the cost of the entire package - including your premium - before reaching a conclusion about which channel to use to buy your cover."

There are other advantages to taking out insurance through an intermediary, including personal attention, assistance in negotiating appropriate terms and conditions, and help in finding products that are tailor made to suit your specific needs.