You can’t have a conversation with a website
Too many times he has heard tales of buyers remorse from people who have purchased auto insurance online, clicking boxes that promise cheaper premiums but carry large deductibles and sometimes little or no coverage.
“It frustrates me,” says Brian Patterson, president and CEO of the Ontario Safety League (OSL). “Invariably, when people talk to me about insurance shortfalls, it was because they bought it online and didn’t realize what they were doing.” It is something Patterson hears all too often at the OSL – how people choose a higher deductible to save what amounts to $30 a year, only to end up paying thousands more when the worst happens.
“They are a mess, because they tried to buy their insurance online. They under cover themselves,” says Patterson. “People go online and start with, ‘I’ll go with a no deductible – no wait, I’ll go with a $5,000 deductible and save $300.’ OK – but when you scrape the guardrail and look for collision (coverage), and find you don’t have any. ‘I didn’t understand the website is what they say. Well, you bought the insurance.” It is what makes brokers invaluable when selecting a policy and the right coverage options, says Patterson – and the single, great advantage that brokers have over impersonal websites.
“Saving $30 for a higher deductible sounds great, until you get a scratch and have to pay for the entire repair,” he says. “A broker can explain that, but you can’t have that conversation online. For an extra $34 a year I increased my coverage to $5 million, but many people won’t do that buying insurance online. And I only did that after a conversation with my insurance broker.”
An excellent example of brokers providing that “value added” conversation with the client is the deduction on winter tires, says Patterson. “You are basically achieving a deduction, based on the proactive activity of your customer,” Patterson tells brokers. “So if you educate your customers to put on winter tires, and you are able to reduce their fees by 6 or 8 or even 15 per cent, you’ve helped them help you meet that goal.”
It is all too easy for people to fall into the trap of going for the cheapest option with the simple click of a mouse. That is why brokers need to look beyond the bottom line when speaking to clients – and stress the advantages of complete coverage to clients, says Patterson.
“From a safety perspective, we say to brokers, ‘When you are talking to the client about coverage – don’t look at the bottom line necessarily,” he says. “Are they volunteering for Rep hockey? Are they carrying kids in the car at different times of the year?” The maze of insurance, that many layman view insurance to be, says Patterson, is where the strengths of the independent brokers are – offering the public the best path, instead of the cheaper, but potentially much more expensive one, offered by insurance websites. “Insurance can be very complicated,” he says. “The benefit of the broker, in my view, is the direct interaction.”
But it is up to brokers to make that phone call, and to show their value to the client. “I think my broker could have explained a $100 worth of savings at least in just a five minute contact call – something a website cannot do,” he says. “Even if you left that in a message, you can bet your (expletive) I would return that call for $100 savings.”