Bimmer Insurance

[bimmer boy 21]

I was told me to f**k off (in the politest way possible) as soon as the found out I was a 18 year old with a BMW, that was before i told them about the mods. I argued it was almost 20 years old and as slow as a toyota corolla, made no differenc, just cos of the propeller badge.

i got told that too

[shadowninja 0]

Sib yes I have clients that deal with brokers on a regular basis. My company doesn't pay brokerage. I can quote multiple examples where clients have gained hundreds of dollars back in premiums by going to the insurer direct.

I am not a big fan of insurance brokers in general. Thats not to say they're all rogues, there are some very genuine operators out there. However the method that brokers are remunerated is directly related to the business they place with insurers, and the way this happens incents poor behaviour.

For example, brokers are usually paid by either an initial commission (by the insurer) where they get paid a lump sum for starting up a new policy. This can be as much as 30-150% of the first year's premiums (the higher end usually for a product like Life or Disability insurance cover. The second form of commission is a 'Trail' commission, usually a much smaller portion of the annual premium but they continue to receive this (5-10%) for the entire lifetime of the policy. This can be quite attractive for a long-term life insurance cover (30-40yrs!)

This often causes 'churn' where the broker will change the insurance provider for the client every couple of years, to maximise the amount of commission. This is often not in the best interest of the client. For starters half the time they never know who they're insured with! ("My broker looks after that for me").

Brokers can sometimes make money by deferring payment of premiums, ie- collecting premiums from the policy holder on the "due date" but not paying the insurance company for another month or two.

OK I could rabbit on for ages on this stuff but it stirs me up

[Deftones 0]

Another question about insurance.  Because I've swapped my bumpers etc with an MTech2 kit, does that mean I should declare it, even though it is factory and not rice at all?  I have declared it on my current insurance but am looking elsewhere now I am 25.

Oh, and I pay $756 at the mo.

Thanks.

as a general rule - declare all mods or you won't get insurance.

Cheers Andrew and Sib. I had a feeling that was the case hence I declared it as soon the change was made. I've also declared my exhaust, air filter, wheels, and the fact I have a manual gearbox.

[kiwi535 538]

i use a broker and i know who i am insured with.my broker always sets out the rates and tells me the rates at a couple of other places...also when i bought the beemer i told him i wanted the best...i am with vero.The only claim i had they were so quick of the mark my car was taken away on the twentyseventh of december and i got it back on about the 2nd week of jan.....as good as new,it was all fixed up before i was asked to even fillout a claim form!!!!

[Guest Andrew]

i use a broker and i know who i am insured with.my broker always sets out the rates and tells me the rates at a couple of other places...also when i bought the beemer i told him i wanted the best...i am with vero.The only claim i had they were so quick of the mark my car was taken away on the twentyseventh of december and i got it back on about the 2nd week of jan.....as good as new,it was all fixed up before i was asked to even fillout a claim form!!!!

so how does a broker work? Do they charge you fees - or is thier service free like Mike Pero bank mortage styles?

[shadowninja 0]

No such thing as a free lunch.

As with mortgage brokers, most insurance brokers are effectively paid by the insurance companies (by way of commissions).

The tendancy can be for a broker to put your cover that pays the best commission rather than the "best" cover. I've known enough brokers to know this happens on a regular basis. There were some major court cases in the USA last year against major insurance broking companies for doing exactly that.

Naturally this is not always the case, and if you can find a good AND honest broker... good for you. Be sure to do your own comparison shopping rather than taking their word for it. I had another client on Tuesday who called their insurer direct to make a claim, and found they were paying $150-200 too much for one of their policies.

[Sib 0]

That stuff with brokers really sucks, i actually work for an insurance company and through that, and my families experience with pur old insurance company, and now trough the AON brokers, i know thay can get you insurance on things other people wouldn't touch, like my brother who lost his licence at 19 going 50km/h over the speed limit and our broker got him covered and is paying less that when he was just insured with our old insurance company direct.

But then again at this stage i dont need insurance...i just sell it.

I just say check your policy wordings really carefully and if you dont understand call and ask, and like Andrew said, disclose everything.

Also do call around before taking out cover, because i know plenty of people here who are just out for the sale, and won't necessarily give you the best deal unless you make them.

[shadowninja 0]

I wondered if you were in the industry Sib, I work for my insurance company too, though I'm more on the financing side of things. Our organisation is a niche market provider, and we don't deal with brokers (all our advisors are salaried, not commissioned including me!)

There are a few of us in the financial services industry here if I remember correctly.