Suppose you want to take out insurance. Then bravo for the decision! Because many people avoid this topic as much as possible. But once the basic decision has been made, the next questions follow. Do you go online? To the representative of Allianz, Ergo or another local provider? To an independent broker? Should you get intensive advice before choosing a special tariff, or is it enough to do a little research yourself?
“The longer you are bound by an insurance policy, the more important it is for life and limb and the higher the sum invested, the more likely it is that you should seek intensive advice before signing and think carefully about your decision,” says Elke Weidenbach, an insurance expert at the consumer center North Rhine-Westphalia. She cites pension insurance, disability insurance and private health insurance as examples of policies that require intensive consultation.
The background: These contracts involve potentially high deposits and long contract terms. A change can be difficult and involve additional financial effort. In addition, with some insurance companies, a change is no longer possible due to previous illnesses, or only with restrictions on the insurance cover.
On the other hand, for example, a private liability policy that nobody should do without, according to Weidenbach, can often be canceled annually and is quite inexpensive – despite the blatantly important insurance cover. “Here you can correct any errors in the conclusion sooner and faster because you can quickly cancel and switch again.” However, private liability insurance can also contain some conditions that do not adequately cover specific risks. If you own a dog, for example, you should have your own liability policy (it is even mandatory in most federal states). “Anyone who concludes the contract on their own and does not obtain sufficient information beforehand can possibly forget this aspect. A consultation can be very helpful here.”
€uro am Sonntag has compiled a list of insurance companies that have a low, medium or high need for advice (see box below).
But where should consumers go for advice? “It is crucial that the consumer informs himself as comprehensively as possible beforehand,” says Weidenbach. “He can also go to an insurance agent who only works for a single provider. Even if you may have had good experiences with the agent and there is a relationship of trust, that’s okay. But the consumer must know that often not all products are one insurer are top in terms of price and conditions.” The combination can also make sense: information via the Internet plus advice in a personal conversation. The number of these so-called hybrid customers is constantly increasing. That’s what pollsters from GfK and consultants from McKinsey found out.
Before you take out important insurance, you should always get an overview of your personal circumstances and financial possibilities. This is where an insurance agent can help. Then the question of certain policies sometimes takes care of itself. First example: private pension insurance: Anyone who has taken out a consumer loan should pay it off first. Even those who do not have the money on the high edge to buffer unforeseen incidents (e.g. a broken car) should first build up credit here. Only then should you consider an additional pension. Second example: term life insurance. If you have no relatives to take care of and do not want to buy a property on credit, you can usually do without it. Such an inventory often separates the wheat from the chaff when it comes to the quality of intermediaries (see box below).
The situation is special for so-called insurance consultants and consumer centers. They may only advise and not conclude any contracts. The fee is between around 100 and 250 euros plus VAT. If you want to conclude a contract, it is best to contact the insurer directly. Sometimes a so-called net contract is recommended, in which no commissions are included and which is therefore cheaper than the – otherwise identical – commission contract.
Fee versus commission
An insurance consultant is also worthwhile if it turns out in the discussion that the intended insurance is not needed at all. Because the fee flows even if he advises against a deal, he will not provide commission-based advice. However, there are only exactly 337 insurance consultants nationwide, and many specialize in certain types of insurance and are not responsible for general questions (list at www.bvvb.de). At consumer advice centers there are only a few dozen options for advice (list at www. Verbraucherzentrale.de).
And you shouldn’t go to an insurance advisor with every topic. “For a liability contract, which usually costs a few dozen euros a year, I don’t have to spend an additional 100 euros in fees,” says Helge Kühl from Neudorf-Bornstein near Kiel, who acts on a fee for pension insurance and on commission for all other policies.
Apart from the insurance agents, all other types of intermediaries work on a commission basis. But there are also important differences here:
Single company representative / exclusive representative
You work for an individual insurer who pays the intermediary a commission for the sale of their own products. Their offices are mostly recognizable by the fact that only one insurer’s sign can be seen. Disadvantage: The customer hardly has a choice. Advantage: A good representative maintains close contact with his customers. This can help with claims settlement, for example. The insurer is fully liable for errors made by the intermediary. The well-known advertising character “Mr. Kaiser” was such an exclusive representative, in this case for the Hamburg-Mannheimer, which has now been merged into the insurance group Ergo.
bank employee
They broker policies on behalf of their bank, usually in their branches. A certain money house almost always has only one cooperation partner on the insurance side. Examples of such cooperation are Deutsche Bank/Zurich Versicherung, Hypovereinsbank/Allianz, Volks- und Raiffeisenbanken/R + V. Advantage: You get banking and insurance products from a single source. Disadvantages: The customer has little choice and may not realize that there is only one product provider. The bank is effectively an exclusive agent and is liable for its employees. Caution: The Postbank, for example, had worked for a while with free agents who sat in the bank branches and – at least at first glance – were indistinguishable from employees. When it came to liability, Postbank rejected all claims.
multiple agent
He works for several insurance companies. As with the one-company representative, the respective insurer is liable for errors. Most financial services providers, such as DVAG, OVB and Swiss Life Select, belong to this category. Advantage: larger selection than with a one-company representative. Disadvantage: The selection is usually limited to a few companies. Brokers and comparison portals usually offer more here.
Part-time intermediaries
This can be a bicycle dealer, for example, who sells his customers insurance to match their new bike. Advantage: easy handling. Disadvantage: Usually there is only one product on offer.
insurance broker
They always work with many companies and therefore have a large selection of offers ready. They identify a favorable policy on behalf of the customer and are also personally liable if they make a mistake in advising (hence they must take out appropriate professional indemnity insurance). They also collect commissions from insurers for mediation. Some financial distributors, such as MLP, are also brokers. Advantage: The broker is legally obliged to provide his customers with the best possible insurance cover. Disadvantages: It is difficult to prove whether he also brokers a provider because of his high commission. Almost never does a broker have all insurers with all products on offer.
comparison portals
Check24 and Verivox are also brokers who earn money from mediation. Advantage: Handling is easy. Disadvantage: Not all insurers are represented on all portals. For example, the market leader HUK-Coburg completely refuses to use this sales channel for motor vehicle insurance, while Allianz, second in the industry, is only involved to a limited extent.
app
Newly founded companies such as Wefox, Knip or Clark have developed free programs that customers can use to conveniently manage their insurance policies via smartphone. A customer must first transfer a brokerage mandate to the provider. That means: He transfers his complete insurance with personal data such as place of residence, income and marital status from his previous insurance agent to a new company. Advantage: easy handling and overview of existing contracts. Disadvantage: You give up the – possibly close – relationship with your previous supervisor. Problems caused by insolvency are quite possible for young companies.
At a glance: HOW MUCH ADVICE DOES WHICH POLICE NEED? PDF
checklist
How to recognize a good insurance intermediary Even if the number of insurance intermediaries is falling, there are still almost 200,000. How do you find the right one? Here are some helpful questions:
Has it been on the market for a while? This can demonstrate a long-term business approach.
Does he clarify his status on his own? That indicates seriousness.
Does he ask for details and does he take stock of your living and financial circumstances? This indicates genuine interest.
Does it offer good value for money (compared to other intermediaries/distribution channels)? That shows competitiveness.
Is it recommended by trusted people in your personal environment? That deserves a leap of faith.
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