Fact vs. Fiction: What’s Really Going On With Your Insurance Policy, Premiums and Claims:

By Linh Le Kim — Personal lines damage insurance broker at Covera.ai

Every year, you get your insurance renewal and if you’re feeling ambitious, you quickly flip through your insurance policy and coverage. You get to the amount due, and to no one’s surprise, your premiums have gone up yet again. You’ve had enough. This year is different. This is the year you finally decide to shop around.

You tap your family and friends for recommendations, read a ton of reviews, and scour the web for countless hours on a quest to find the best deal. You get in touch with a few providers, and after answering exhaustive questions on the phone with a monotonous customer service agent based from who knows where, you find the prices vary enormously despite you asking for the same coverage. Why is that? Are the higher priced insurance providers just trying to take advantage of you, or are the cheaper companies giving you terrible coverage?

It all comes down to your end goal. Are you getting insurance because of an obligation to mortgage/financial lender/landlord? Or do you want to understand what you’re buying and know the difference? If it’s the former, finding the cheapest option is fine since all companies are regulated by the same overarching organization (In Quebec it’s the AMF). If it’s the latter, you’re better off with a broker because:

1) They work for you, not the insurance company. Direct companies (Those selling policies from a single insurance carrier) can be cheaper, but when it comes to insurance, you get what you pay for. They cut out broker commissions, true, but they also give you thinner coverage so long as they can close the sale. They bank on that fact that you won’t understand the weakness of your coverage until a claim occurs. On the other hand, a broker knows that each company has a niche market, and can help you find the best value without compromising your protection. (There is an exception to that rule, but more on that later.)

2) A good broker will advise you on the correct coverage. When you go see a doctor, do you want them to ask you what kind of care you want? Or do you want them to tell you: “Here, you need this.” An experienced broker will know the nuances between insurances and will protect you from being over or under-insured.

3) Claims satisfaction is directly correlated with the claims adjuster you are assigned, not the company. If there are any problems, a competent broker will fight the adjuster on your behalf to arrive at the best possible outcome. When you’re insured with a direct company, you will be left to fend for yourself, and the odds are almost always stacked against you.

Are all brokers the same?

Financial Interest

Not all brokers are created equal. More and more insurance companies are buying shares of brokerage offices and are ultimately turning these offices into agents, much like the direct companies. How can a broker market for you if they have financial interest in one main competitor? The reasons behind why brokerages are doing this are complicated but for your sake, if you are currently with a broker, ask them which companies they deal with when quoting you. If they only deal with one, you may need to rethink your options (hint: subscribe to Covera.ai).

Inefficient Processing

If you are lucky enough to be with a brokerage that is still financially independent from an insurance company, then you are presented with another problem: inefficient processing. Insurance brokers have a lot of work cut out for them; quoting and processing policies is a time consuming, arduous process. Most brokerages do not have the manpower to shop insurance for all their clients every single year.

Why Covera is different

Client-side Empowerment: instead of having to talk to a broker for your insurance needs, you can submit a quote online at any time and even accept or reject your offer through email. Everything is automated and digital so you don’t have to sit there wondering if your broker forgot to mail you those pink slips.

On-demand Access: you can log into your insurance portal to view your policy at any time, from anywhere.

Data Driven: We’re able to follow through on our promises because we make up for the manpower by leveraging technology and data driven digital solutions to give you the best insurance solutions.

About the Author: Linh Le Kim is a tech enthusiast, coffee addict and personal lines damage insurance broker of Covera.ai, a digital insurance brokerage that takes insurance renewals off of your to do list, forever. Covera builds a detailed profile on your behalf and, before your policies expire, present you with a small number of curated alternatives that can be purchased in minutes. Support us by signing up to our waitlist.

Follow us on Twitter: @getcovera

Join our team: Covera.breezy.hr

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