In New Zealand, an insurance adviser is a person who is licensed to help people with their insurance. They are engaged by a client, such as yourself, as a trusted expert to assist in purchasing insurance. They help to bridge the gap between the client and insurers by using their skills and knowledge to make insurance easy to understand, purchase and manage.

The scope of work for an insurance adviser can include:

• Understanding your insurance needs

• Working with you to see what you can afford with your insurance

• Shopping on your behalf to compare multiple options and quotes

• Explaining insurance policies and terms

• Helping to purchase policies and review them regularly

• Supporting claims

It depends on how much you know about insurance and if you want to do it all yourself or have an expert to assist with getting your insurance sorted.

In a recent survey, more than 60% of Kiwis told us they wanted an insurance adviser to help with comparing policies, provide expert help navigating insurance, and to save time. These results show that insurance can be confusing and time consuming, and some people don’t want to deal with it alone.

Insurance advisers can help with a range of different products covering General insurance (car, contents, house, boat, etc.), Life (trauma, income protection, mortgage repayment, life, etc.) and Health insurance. Business insurance is another area where advisers are commonly used.

Here are some benefits of using an insurance adviser:

1. Save time and effort

   • An adviser can cut down the time and effort it takes to compare insurance and decide which one is the best for you. This can be a time-consuming and frustrating exercise. It takes time to gather quotes across different insurance providers and then to compare the difference in what it covers you for. Advisers can also help when your insurance situation is not straight forward. Maybe you’ve had driving offences in the past, your house is in a natural disaster zone, you’ve just bought a brand new property and the address is not yet showing or you’re a landlord with multiple properties and it is a nightmare to get all of it sorted yourself. A good insurance adviser could be helpful.

2. Have an expert guide you

   • Advisers are skilled in dealing with insurance. Good ones live and breathe the industry, therefore, they will be able to understand your needs quickly, find different policies that are most suitable, highlight key benefits and provide advice or recommendations to simplify your decision making. They’ll be able to understand what is important to you and help to point out common risks and pitfalls.

3. Cut down the complexity

   • Advisers act for customers. They deal with all the nitty gritty details when it comes to insurance. Advisers can explain the parts of a policy you don't understand or help with providing the right information to insurers in your application so you are properly assessed and covered. Industry jargon can make it confusing for most people, for example, Sum Insured vs Area Replacement vs Market Value on a house insurance policy. It can mean thousands of dollars of difference at claim time if you don’t understand what you’re covered for. Some benefits within a policy may be less important for you compared to other benefits it offers. Advisers can help to point out the key points.

Yes! We have insurance advisers that can help our customers and yes we are quite different from other advisers in the way we operate.

Traditional advisers typically operate offline, meaning they may turn up at your door after work hours, have you fill out paper forms and try to engage you in more traditional ways when it comes to insurance. Some people may like that, but not us.

For us, we believe in using technology to create a much more seamless and efficient experience. We offer the expertise of an adviser but with the convenience of digital experiences.

What sets us apart from traditional advisers is our desire to keep everything streamlined and online which means we do not need to cut corners to deliver the results customers want.

For example, some advisers may only present you with one policy and not bother to do an actual comparison across several insurers because it takes too long. At Quashed, we try to provide no less than 3 quotes and we are able to do it in record time because we use technology and digital experiences to streamline the process.

Advisers can help with both personal (also known as domestic insurance) and also business insurance products. On the personal insurance side it usually covers:

• Vehicle

• Contents

• House

• Landlord

• Boat

• Life (incl. Trauma, Income Protection, Mortgage Repayment, etc.)

• Health

Business insurance is another set of products where advisers can help. Everything from commercial vehicle insurance to public liability and professional indemnity insurance; some advisers specialise in particular business insurances and if you’re operating in a niche industry or scope of work, you may be better off with an expert in that area.

It is key to understand the difference in the types of policies (i.e. “direct” vs “indirect”) when considering engaging an adviser. Direct insurance products can only be accessed directly by going to an insurer whereas indirect insurance products can be accessed only via an adviser. Below is a comparison table highlighting the difference:

Comparison of benefits between a Direct & Indirect House insurance

Generally speaking, “indirect” insurance or those that are accessible via an adviser provide more comprehensive cover. This can sometimes mean hundreds if not thousands of dollars in difference at claims time. An example above is the hidden gradual damage benefit that comes in handy when you’ve got a leak behind walls that is not immediately noticeable. Over time it can cause serious damage before you notice it. By then, the cost to repair or replace the wall could likely cost far more than $2,500. With a Direct policy such as the one compared above, it could leave you a hefty bill to pick up out of your own pocket.

Common characteristics of an adviser include:

• Knowledgeable on insurance products

• Interested in understanding your needs and wants

• Compares multiple options across insurers

• Transparent with the way they work and are paid

• Easily contactable when you need them

1. Good communication

   • Whether in person or online, advisers should have clear and regular communication with their client to ensure they have a good understanding of exactly what is going on. They should be asking questions, responding appropriately and continuing to communicate regularly and promptly throughout the process.

2. Skilled and knowledgeable

   • Customers’ circumstances and needs can be quite different. The adviser you choose should first and foremost be qualified and competent to give you advice - ask for their disclosure statement. This demonstrates that they have the minimum requirements set out by law to help you with your insurance. They should be able to confidently help you understand insurance, provide you with options and make recommendations based on your needs.

3. Putting your interest above their own

   • The adviser must be prioritising your interest above their own. For example, they should not be recommending a product to you based on how much more they get paid for it over another potentially better product for you. However, this does not mean when an adviser is paid the most for one particular product over another it means that they are prioritising their interest. It could genuinely be the best product for you and the highest paid product for them. Win-win does exist.

4. Licensed and registered

   • Insurance advisers in New Zealand are governed by the Financial Markets Authority and are now required to be licensed and registered. You can check if the adviser you are engaging is properly licensed and registered by checking the Financial Service Providers Register.

The good thing about most advisers in New Zealand is that they are free for you to engage and do not cost you anything. Advisers are paid via commissions (commonly between 5% - 25% of the premium) that is paid to them by the insurer, should you choose to purchase a policy with their help.

The way it works is that insurance companies have to spend a lot of time and money trying to provide you with a personalised service and therefore they pay advisers a commission when they help you purchase a policy with them. You can also think of it as a referral fee or a marketing cost for the insurance company that they would otherwise have to pay to Google or Facebook.

For some of you that think an insurance adviser is only for the rich and upper class amongst us, it is not. Everyone can access and use an adviser even when your property is not worth millions and your car is not worth hundreds of thousands. They can be equally helpful to make sure you too are well protected when something goes wrong, you’re not out of pocket.

However, do note that some advisers charge a flat fee for their advice (for example $500 to help put in place house and contents insurance) and others charge a fee on top of the commissions they earn from an insurer. This may or may not be higher than the commissions received from an insurer.

At Quashed, we’ve chosen to go with the common practice of making it free for customers to access advice. We are only paid by an insurer when we successfully help a customer purchase their policy. This way, it’s a win-win for us and our customers!

As mentioned above, advisers operate in the “indirect” insurance products space. Let’s take a look at the examples below to see how the cost is different when you purchase via an adviser.

Generally speaking, adviser “indirect” insurance products can cost slightly more. However, this is in return for often higher benefits and coverage in the insurance policy. There is also the added benefit of having an adviser that is accessible to you to make sure you’re properly covered. They can help with making changes to your policy when you need to, check in and answer questions you have and importantly fight for you to get what you are entitled to at claim time.

If it does cost more to buy an indirect insurance product via an adviser, the question to ask is if the difference is worth the convenience, expertise and support that is available to you.

Engaging with an adviser should be a straightforward process:

1. Find an insurance adviser

2. Tell the adviser what you are looking to protect e.g. car, house, contents, life, health

3. Provide information to get quotes e.g. address, value of item, DOB

4. Adviser researches and compares policies for you

5. Adviser presents you with a number of quotes and their recommendation

6. Decide if you want to take their recommendation and cover or opt for an alternative

7. Adviser completes the purchase for you and sends you the invoice for payment