How to find the right insurance

Completed in a jiffy, useless in an emergency: Insurance is not something you should decide on lightly. What you need to bear in mind.

Brokers, agents, fee-based advisors: the difference is not always clear to consumers. The question is: who can provide the insurance they need? Where can they get tailored advice? And where do the prices and services match up? Experts shed light on the insurance jungle. These are the sales channels:

The exclusive agent usually only works for a single insurer. Therefore, he can only offer products from this insurer or at most those from cooperation partners. This means that the selection is smaller, says Prof. Matthias Beenken, who teaches insurance at Dortmund University of Applied Sciences. These agents often have a local office.

Some insurers do not use intermediary sales people and sell their policies directly via their own website. In direct sales, consumers are assisted by an employee of the insurer, for example, over the phone or in a video call. Contract offers then come by email or post.

It is called annex sales when, for example, a travel or electronics provider offers the relevant insurance when booking a vacation or buying a smartphone. The sales people are usually not experts in the field of insurance.

An insurance broker provides advice independently of the provider. Because he does not work for an insurer, he can make offers from various insurers. He is even required by law to have a comprehensive market overview of the policies he sells, says Peter Grieble from the Baden-Württemberg Consumer Advice Center. Comparison portals on the Internet also count as brokers.

A fee-based advisor must also have a comprehensive overview of the market and advise consumers independently. Unlike a broker, however, he is not allowed to collect a commission for concluding a contract. Instead, he is paid on an hourly basis.

Here are the differences:

“Advice has to be given,” says Peter Grieble. This applies – with one exception – regardless of the type of sales channel. Agents, brokers and consultants must first find out what their customers need and then offer them suitable policies based on that. If sales representatives and consultants do not have an insurance plan that covers the client’s needs, they are not allowed to make an offer, according to Grieble. Brokers should also not allow themselves to be driven by the expected commission when providing advice.

However, there is a crucial difference between exclusive agents and direct sales on the one hand and brokers and fee-based advisors on the other: the former are on the insurer’s side, the latter on the insured’s side, says Grieble. This can make a big difference in terms of advice – simply because of the significantly larger range of services offered by brokers and fee-based advisors.

The annex sales department is the only one not subject to an obligation to provide advice. “I need a bit of luck if I want to be insured based on my needs,” says consumer advocate Grieble. That is why he generally advises against taking out this type of insurance.

If an insured event occurs, it is always good for the insured to have a personal contact person they can turn to – such as the agent or broker. In particular, if a claim is made under occupational disability insurance (BU), the specialist should be involved, advises Julia Alice Böhne from the Association of Insured Persons.

In the case of minor damage, for example, which affects your home contents or personal liability insurance, you can also contact the insurer directly, says Böhne. Many providers allow you to fill out the damage report online on their website, add photos and send it off – there is no need for a middleman.

According to consumer advocate Grieble, the broker still offers one advantage: policyholders can agree that the broker regularly checks whether the insurance tariff is still suitable. If there are better, more suitable or cheaper tariffs in the meantime, the broker will then inform them of their own accord. Policyholders must ask the agent or the insurance company themselves if they want to stay up to date.

Anyone who visits a fee-based advisor to get advice on insurance issues usually has to pay them by the hour – insured persons should expect to pay 100 to 150 euros per hour. This sounds expensive, but it can be worthwhile, especially for long-term and expensive policies such as BU. The tariffs are then usually cheaper because the premium can no longer include a commission, says Grieble.