Insurance can be complex and it’s common to seek expert professional advice sometimes rather than going it alone. Talking to an adviser (or commonly known as a broker) is an especially popular option if you are considering getting a health or life insurance policy.

As with any professional adviser, it’s important to get someone you trust to act in your best interests, and someone who has received proper training and is competent to do the job. Make sure you do your research and get an insurance adviser who works in the right field: most advisers specialise in either general insurance or life insurance, but not both. Not all insurance advisers have a digital presence, but for those that do have one it might be easier to read up about them and their business before engaging.

Qualifications and licensing

Insurance advisers fall under the umbrella of providers of financial services, and as such are regulated by the Financial Markets Authority.

From 2021, insurance advisers in New Zealand joining the industry will need the New Zealand Certificate in Financial Services (Level 5) to practice as advisers. Like anyone else providing professional financial advice, insurance advisers also need a Financial Adviser, or Financial Advice Provider, licence.

There are no degree-level courses insurance advisers need, though they often have a background experience in related areas, for instance accounting or business.

The cost of your insurance adviser

Insurance advisers are usually paid on commission from the insurance provider once they sign you up. Your insurance adviser might also charge you directly for some aspects of their advice, particularly if your situation is complex but this is less common. Insurance advisers should always let you know how they are paid: don't be afraid to ask if this isn't clear to you. This is now a requirement in their disclosure to you as part of their service.

There are four different types of commission:

• Upfront commission: a commission that is paid as soon as you are signed up to a policy.

• Trail commission: an ongoing commission (smaller amount) which is often paid yearly to the adviser for the help and assistance with your ongoing needs and changes that may be required to your policy.

• Bonuses: paid for meeting criteria, such the number of policies sold or retained.

• Soft commission: other non-financial perks of the job although this has been scrutinised by regulators and therefore is not as common anymore.

Some insurers will ask for a commission from an adviser to be returned if you cancel your policy within two years. Insurance advisers sometimes deal with this by passing the cost onto their customers: this is something to ask your adviser about before you sign up to anything.

What you can expect from your adviser

Your adviser should explain to you how insurance works, discuss your specific situation, budget and your goals when it comes to the policy. You will need to explain what risk you want to protect against: in the process you will probably end up discussing your income, your age, your health, any previous policies you have had and how much you think you can afford to pay in premiums.

If you want health insurance, are there any particular diseases or illnesses you want protection against? Your adviser may be able to guide you towards policies that provide good coverage of those conditions, while leaving out those you don’t feel you need insurance for. To get the best from your adviser, it's important to be honest, for instance about any pre-existing conditions you have.

When it comes to choosing a provider, talk to your adviser about which companies they have access to products from, and have experience of, and how they have handled claims in the past. Ideally your adviser will shopping around for you and comparing offers from different providers, and they will take your budget into account.

If you already have an insurance policy and the adviser recommends that you switch, make sure you discuss all the potential points of difference with them. One area that is important to consider if there will be any pre-existing conditions you have that will not be covered in the switch as that could leave you exposed to more risk.

As with any financial adviser, your insurance adviser should provide you with clear advice that is easy to understand, and you should feel comfortable asking them questions if there’s something that does not make sense. If you feel uncertain about your adviser and you’re not able to resolve your concerns with them, you shouldn’t feel obliged to continue receiving their advice.

Finding an insurance adviser on Quashed

If you would like some expert advice on getting and insurance policy or changing your insurance policy, you can simply use Quashed to book a time with an insurance adviser, to talk about either life insurance (including mortgage repayment, income protection and total permanent disability) or general insurance. To take advantage of this free service, all you need to do is sign up to the platform today and click on Explore - Find an Adviser.

Quashed also provides a free Market Scan tool, which allows you to compare your current general insurance policy (Car, Contents, etc.) to others on the market. This does not provide advice but it scans the market for prices and a summary of benefits across insurance companies so you can make the decision.

Code of Conduct

As with other financial advisers in New Zealand, insurance advisors have to comply with a professional Code of Conduct. This includes:

• Treating clients fairly

• Acting with integrity

• Being competent and having appropriate knowledge and skills

• Give appropriate advice and ensure it is understood

• Protecting their clients’ information

Your remedies if things go wrong

If you are unhappy with the services your adviser provided, the usual course of action is to contact the adviser directly first and try to resolve the issue yourself. If you don't feel the issue has been resolved, the next step is to take it to a dispute resolution scheme. Every financial adviser in New Zealand belongs to one of four schemes:

• The Banking Ombudsman (solely for banks)

• The Insurance and Financial Services Ombudsman

• The Financial Dispute Resolution Service

• Financial Services Complaints Ltd

The dispute resolution process is similar to arbitration: you won’t need any lawyers or have to pay court costs, and both parties agree to abide by the decision made. Aside from the arbitration process, if your insurance provider has broken the law, the Financial Markets Authority or the police can get involved: usually the dispute resolution scheme will let them know something needs further investigation.