20nov best way to buy insurance hero
27 November 2020

Best way to buy insurance? Buy direct.

Our latest insurance survey finds consumers who buy direct are happier with the service they get.

Buy insurance from your bank or an insurance broker and you’re much less likely to be a satisfied customer, our latest survey shows.

As we’ve found in previous years, consumers who buy direct from the insurer are much more likely to be happy with the service they’re getting, compared with those who buy cover from a bank or a broker.

This year, just 36 percent who bought house insurance from a bank and 47 percent who bought from a broker thought they were getting good service. In comparison, 57 percent who bought direct from the insurer were happy with the service they received.

We found a similar trend for contents, car and life insurance. Satisfaction was lowest among those who bought life insurance from a bank or broker.

Customer satisfaction

Our advice

Regularly review your insurance cover and shop around if you’re not getting good service:

  • When you get your annual renewal notice, check if you could save by switching companies.

  • Get at least three quotes. Premiums can differ by hundreds of dollars.

  • If you’re unsure about what a policy covers and its exclusions, get the company to explain it to you in writing.

  • Regularly review how much cover you need, especially after major life events such as marriage, divorce or having children.

  • If you’re changing insurers, don't cancel your old cover until you’re confirmed as a customer of your new insurer on terms you’re comfortable with.

Junk insurance policies in rubbish bin.

Help us fix the insurance market

Consumers are paying more than ever for insurance. But they're not getting a fair deal. We're calling for simple changes that will help ensure the market works better for consumers.

What needs to change

Member comments

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James C.
14 Dec 2020
Industry mired in conflicts

Problem is the brokers are paid commissions from the insurance companies for the policies they sell and that can only result in conflicts of interest. Most insurance companies seem to spend between 15-18% of premium income on commissions to brokers. So every year a customer renews the insurance, a slice of the premium paid goes back to the broker.

Many consumers don't trust that a broker will consider all offerings in the market. I have all my insurance with NZ insurance Co. FMG which is a mutual so owned by policy holders (customers). I find them fantastic - may pay a little more but rock sold with a good credit rating. As far as i know, customers deal with FMG directly and they don't pay commissions to brokers, therefore brokers won't even consider FMG when recommending insurance to customers. Therein lies the problem and I can't see the new regulations addressing this issue.

I stand to be corrected if that is not the case?

Nicholas T.
12 Dec 2020

As a retired, self-employed, insurance broker what worries me about reviews about insurance is that they usually concentrate on premiums. Whilst premiums are, of course, important (even to an ex broker!) they only reflect a small percentage of the story.

Such reviews and comparisons should first concentrate on the cover provided and a long way after that compare the premiums.

It is also no good looking at the sub-limits alone ~ one has to delve deep into the wording itself to see whether or not there are serious omissions. That is not something that many non-professionals can do.

It is far too facile to look just at the premiums and sub-limits and draw up a comparison.

Who would care if they discover that they have paid $100 less premium when, at the time of a major issue, they find that the matter is not insured - but would have been through another insurer.

New Zealand desperately needs an Insurance Commissioner (as exist overseas) with the power to enforce fair practices.

The latter is something that we should all encourage.

Allan H.
12 Dec 2020
Insurance Broker

I am in the same category ( retired Broker ) and entirely agree with these comments.