If you have a fleet of vehicles or even one commercial vehicle as part of your business, then you’d be aware of the need to have adequate motor vehicle insurance to protect your business in case of an accident.
The numbers are sobering:
- there are more than 600,000 commercial vehicles in New Zealand
- around 30 per cent of all accidents involve drivers who are driving for work
- it’s estimated that, on average, one in four work vehicles is involved in an accident each year
- each incident costs companies more than $15,000.
With this in mind, it’s clear just how important it is to have the right insurance. Finding the right policy for your business can be tricky, so it’s important to know that you can trust your broker.
Eight questions to ask your insurance broker:
- How much experience do you have with clients in my industry?
It’s important to choose a broker that knows your industry and your business, because then they’ll have a good idea of the risks you face.
- How many successful claims have you helped file?
A good insurance broker will be with you not just when you set up the policy but if you have to make a claim. Their knowledge of the process and their relationships with the insurance company should make it easier for you to make a successful claim, so you’ll want to understand how much experience they’ve had in shepherding successful claims through the process.
- How can I reduce my risk?
A good insurance broker should also act as a risk advisor. They should be able to provide you with ways to reduce risk, which can also potentially reduce the premiums or excesses that you may need to pay.
- Which insurance providers do you work with?
Ideally your insurance broker should work with a broad range of insurers so they can get you the best deal available, not just the best deal among their small group of insurers.
- What incidents will we be covered for and what is excluded?
Understanding exactly what you’re covered for and what you’re not covered for is essential so you can determine what additional risk your business faces. For example, if you face an unaffordable excess for accidents involving drivers under 21 years of age, then you may decide that only employees aged 21 and over are allowed to drive company vehicles. Or, you may decide to set aside funds to cover that excess.
- If a better policy becomes available, will you let us know?
Like any industry, the insurance industry is constantly evolving and insurers are regularly updating their policies. Your insurance broker should be on top of these changes and should be able to provide you with regular updates either in the form of a newsletter or a personal email. If a better product becomes available, your insurance broker should work proactively to make sure you’re still getting the best deal.
- What are the downsides of this policy?
A reputable insurance broker will give you all the information you need to make the right decision. That means being honest about any negative aspects of a policy as well as the positives. For example, the policy might seem cheap, making it attractive for your business, but that saving may come with a higher excess or more exclusions compared with a different policy. Your broker is obliged to set out the pros and cons of each policy clearly to help you make the best decision.
- What fees do you charge?
Insurance brokers provide a valuable service and are compensated accordingly. Generally, brokers are paid commissions from the insurance premiums their clients pay, as opposed to being paid a fee directly by clients. The fees are usually a fraction of the cost involved in managing claims, negotiating with adjusters, and finding the right policies for clients. Broker commissions are well justified and a good broker should have no problem disclosing their fees.
Once you’re satisfied that your broker has answered these questions (plus any others that relate specifically to your business or unique circumstances), the next step is to find out how responsive they are. A broker who can’t return your call or email in a timely fashion likely has too many clients to service, which means you may not get the attention you need in the event that you need to make a claim.
Finding a good insurance broker may seem complicated but, with the right broker, you should enjoy a long and mutually-rewarding relationship. It’s therefore worth a bit of time upfront to make sure you’re choosing the right broker for your business.
NZbrokers offers access to the largest selection of independent brokers in New Zealand. To find out how we can help you, contact us today.