Insurance through broker - good idea?

MattDB · 21 May 2018 at 12:15PM

I'm just after some opinions on the following:

We're in the process of buying a house, we've got mortgage offer, survey was fine. We went through a broker for the mortgage (free service) and the guy we dealt with was really nice, I didn't realise that the brokers was a sort of 'one stop shop' so before we knew it we'd used their recommended solicitors (this was fine as it was quite a bit cheaper than the only other quote I got), I declined their surveyor as we had been recommended one previously.

Insurance is next on our to-do list. The broker is being quite persistent in e-mailing us about coming in to talk to him, I'm happy to do this but I genuinely have a problem with politeness and so if we go, we'll almost certainly go through the broker for insurance (rather than having a think about it).

However, I thought that it might be a good thing to go with someone who's got lots of experience and knowledge of the market, I assume they'll earn commission but if it's free from our side is this likely to cost US more money than if we found an insurer on a comparison site? There's a lot of small print and I think a broker would be useful in helping us navigate this? I've spoken to a couple of recent house-buyers at work and they're given me exact opposite advice so I'd really value some more opinions on the matter.

What are the advantages and disadvantages of going through a broker?

all the best,

M

dunstonh · 21 May 2018 at 12:30PM

However, I thought that it might be a good thing to go with someone who's got lots of experience and knowledge of the market,

First thing to make sure is that your mortgage broker is what you think they are. A mortgage broker can be whole of market for mortgages but tied to a single provider for insurance. For example, a very large number of estate agent brokers can arrange mortgages from the marketplace but are tied to legal & general for insurance purposes. Brokers tied to one insurer are never going to be as knowledgeable as a whole of market/independent adviser.

I assume they'll earn commission but if it's free from our side is this likely to cost US more money than if we found an insurer on a comparison site?

A comparison site will be cheaper. You wont get advice from a comparision site. So, you will need to get it right. Dont be like the person that posted recently that didnt compare like for like and replaced their life & CIC policy with a life & TI policy thinking they were the same thing.

What are the advantages and disadvantages of going through a broker?

There are no disadvantages going through a mortgage broker that is whole of market for insurance. Other than they will be more expensive than a comparison site. If you DIY, you do not get the consumer protection that advice gets you and you need to know what you are doing. If you do, then its fine. If you are including CIC then remember that its not all about price. Budget plans will be cheaper than comprehensive. However, there are some good value comprehensive plans and some bad value budget plans. So, you need to look at the coverage and quality of plan.

Comparison sites also do not include all types of insurance. They cherry-pick the easy stuff. Such as retailing PPI types of income protection when PHI is usually better (but not offered by most comparison sites or only limited to a few with online applications - a lot still use paper and they wont appear).

MattDB · 21 May 2018 at 5:29PM

Thanks for that extremely comprehensive reply - incredibly helpful. I didn't think to check if they were a whole of market for insurance as well - I assumed of they were for mortgages then they would be for insurance too but that's definitely something to check out - assuming I can just ask them this outright before committing to an appointment.

MattDB · 21 May 2018 at 5:34PM

Thanks for that extremely comprehensive reply - incredibly helpful. I didn't think to check if they were a whole of market for insurance as well - I assumed of they were for mortgages then they would be for insurance too but that's definitely something to check out - assuming I can just ask them this outright before committing to an appointment.

Thanks again.

dunstonh · 21 May 2018 at 5:37PM

I assumed of they were for mortgages then they would be for insurance too but that's definitely something to check out - assuming I can just ask them this outright before committing to an appointment.

It is actually something that should be disclosed on the very first meeting. However, the tied agents have a way of masking it (often not saying they are tied but using the fact they are whole of market on mortgages to make out that they are whole of market everywhere). Their initial disclosure document given to you should give their status. If you cant find it then ask them.

MattDB · 22 May 2018 at 8:40PM

I just got in touch today and they DO look at the whole market so we're going to speak to them!
Thanks

Insurance through broker - good idea?

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