Consumers generally think they benefit when they buy insurance direct but is it true?

We’ve asked people what matters to them when buying insurance, and in turn our panel used those criteria to evaluate the differences between buying insurance via a broker and buying direct online.

Why do consumers hate the middle man?

Primarily, customers perceive any middle man as an unnecessary third party, and conventional wisdom dictates that this means additional cost and possibly mistakes. Advertising by insurers to ‘go direct’ has compounded this feeling.

What is important to consumers?

In order of importance, these are the things people said matter to them:

• Cost.
• Ease.
• Speed.
• Peace of mind that everything is covered.
• Security of personal data.

So let’s now analyze these items and let our panel judge how each performs when insurance is bought directly or when via an insurance broker.

1. Cost

Contrary to popular consumer belief we found that insurance broker pricing was actually better than direct insurance pricing.

The reason for this seems to be principally due to insurers providing different rates to brokers, in order that premiums are lower. Why would insurers provide special broker pricing? Simple: because the risk is lower for the insurer. Brokers are professionally trained to choose the right policy for their customers, and not to under insure, therefore avoiding unnecessary claims while maintaining the correct premium income.

‘Cutting out the middle man’ it seems, does not save money this time. On the contrary!

2. Ease

Many of the consumers in our test case were surprised here. At least half began our test with the impression that buying policies directly would be the easiest option for them. After trying both, almost all had changed their mind.

While the online experience usually proved more pleasant than the phone, most insurance agencies or brokers offered an online service, and were far, far more pro-active after they received the initial quote request from the consumer, often answering queries by personal email or call and helping to reassure customers with a human service. Furthermore, most direct services completely fell down when queries or changes were required that were less common, particularly later in the policy life cycle. Brokers really shone through here.

3. Speed

The results here were quite evenly balanced. In the case of the time taken to generate initial quotation figures, direct services (online) were consistently very quick, while some brokers answered quote requests by personal follow up.

The difference however was somewhat reversed when it came to mid-term changes, documentation requests and one off queries. The direct services often fell back to large call centers whose staff had little or no real insurance knowledge. In this areas brokers were more efficient, making suggestions our consumers found highly useful, saving them lots of time.

On balance, the speed at which quotes were produced by the direct services was not significant to our consumers when compared to the speed and efficiency with which brokers generally managed their policies throughout the policy life cycle.

4. Peace of mind that everything is covered

We saw few surprises here. Insurance Brokers were largely far more efficient at cross checking policies than consumers, and also very good at educating their customers, explaining what types of cover were available and answering queries.

Direct processes were better than in the past but put too much focus on the consumer to do this work himself/herself to be able to compete with the level of service provided by brokers.

The really good Direct services centered around only covering the low risk policies, and leaving any consumer with non-standard requirements high and dry.

5. Security of personal data

This was a difficult one to test, and fell largely to our technical team. We did however take into account how consumers felt about their data security after using the various services.

On the phone, brokers, being far better equipped to deal with specific insurance questions and used to a human discussion, gave people a stronger feeling that they were in safe hands. The process of securing personal data was much the same as with direct, but the trust conveyed by brokers was better.

Summary of Results- So who won? Broker or Direct?

Cost. [Broker]
Ease. [Broker!]
Speed. [Broker, though people admitted they were heavily biased due to point 2.]
Peace of mind that everything is covered. [Broker]
Security of personal data. [Broker]

Conclusion

We set out in this article to test the general perception by consumers that ‘going direct is better’, for the benefit of consumers and brokers on the whole. While we didn’t test every website and every class of insurance, the results with our test users were conclusive.

While conventional wisdom dictates that the middle man offers little to the discussion and always has his price, in the complex world of insurance, perhaps things are not so simple, and after doing some research at RiskHeads….

Our recommendation to all would be to trust your broker, let him shop for you, and you will likely reap dividend, while living an easy life!

For an insurance quote or to review your policy, contact Lallis & Higgins Insurance in Weymouth, MA.

riskheads.org

College is expensive enough without finding out too late that an accident or theft isn’t covered under your current policies. So, as you get your children ready to head off to school in the fall, there’s one vital “to-do” to add to your list (other than writing that tuition check): a review of your insurance coverage.

It's important to keep in mind that policy language varies from state to state, and there are never "one-size-fits-all" situations, but below is a general guide. If you have questions, or want to go over your insurance needs, don’t hesitate to contact us!

HOMEOWNERS (may vary by state and individual policy)

• Coverage of personal property: Most homeowners policies provide 10 percent of Coverage C (Personal Property) for property owned by an insured that is at a residence other than the insured’s. For example, if the contents of a policyholder’s home are insured for $100,000, a student’s property up to $10,000 would be covered if living in a dormitory – provided the damage is caused by a covered peril and the student meets the definition of an insured.
• For apartments or houses off-campus, the same coverage generally applies. Certain items, such as jewelry or expensive electronics, may require special coverage, or a “rider.” Renters insurance is strongly recommended if a particular policy does not cover a student’s personal property.
• Liability coverage: There usually is an exclusion for damage to property rented to an insured, so generally damage to a dorm room or apartment would not be covered.
• Ensuring adequate coverage: Contact us to get specific answers and information about your coverages. Also, it’s a great idea to create an inventory of the items your student is taking to school, as is keeping photos of and receipts for the items.
• Renters insurance: If your student’s needs can't be met under your current policy, don't forget renters insurance. Landlords’ policies generally only cover the structure, not the possessions of renters.

AUTO (may vary by state)

• Coverage without a car at school: If your student will continue to drive while at home on school breaks, they should continue to be listed on your auto policy. If they are attending school more than 100 miles from home, and are not taking a vehicle with them, the policy may qualify for a distant-student discount.
• Coverage with a car at school: In most instances, a car registered to parents and listed on their policy will be covered if used by a listed student away at school. But you should make sure that your insurance carrier writes coverage in the college’s state and location. And note that a change to the principal location of the vehicle could result in a change in premium.
• Driving a friend’s car at school: Students generally would be covered while driving a friend’s car if the students are listed on their parents’ policy and do not have regular use of the vehicle. The coverage would likely be secondary in this case, as the carrier for the friend’s vehicle likely would be the primary coverage.
• Coverage discounts: In addition to the possible distant-student discount mentioned above, students may qualify for a good-student discount. To qualify, most insurance carriers require that a student must be enrolled in at least four courses per term as a full-time student at an accredited college or university and meet certain academic qualifications. Also, drivers under the age of 21 who complete a driver education course may be eligible for a policy discount.

Going away to school is an exciting time for both students and their parents. Making sure you’ve got the right insurance coverage can help you protect your assets as you invest in your child’s future. We’re happy to discuss your coverage and options — just give Lallis & Higgins Insurance a call or stop by!

Solar Eclipse FOMO (Fear of Missing Out) is real and on the rise as the day of totality draws near, so here’s our guide to make sure you don’t miss your chance to see it in Boston.

Last seen in North America in 1979, a total solar eclipse occurs when the moon’s orbit aligns with earth and the sun perfectly to completely block out the sun, and causes daylight to darken for a brief moment. However, as historic as the eclipse may be, it’s more than stepping outside and looking up. NASA and other experts emphasize the importance of wearing protective eyewear (not sunglasses) while looking at the eclipse, because while the sun is dark, it still emits harmful light to the naked eye that could result in permanent vision loss.

Monday’s eclipse will be viewable all across North America, and the weather on Monday afternoon looks like it should be staying clear, with peak viewing of the phenomenon happening between 1:30 p.m. and 4 .p.m. Even though Boston won’t be in the path of total darkness, several places around the Hub offer public viewing parties to watch the partial view. A few locations will also provide the necessary glasses in case you didn’t get yours in time, they were all sold out, or you got counterfeit glasses from Amazon.

Boston Public Library: Three city branches plan on hosting viewings, and the Central Library at Copley will have activities and a live stream of the path in its courtyard. One of the more popular eclipse events, the library tweeted out that their public supply of glasses is already gone, and the rest will be at the event:

BostonPublicLibrary @BPLBoston
Due to popularity, we are out of eclipse glasses. Some locations have events 8/21, & space is 1st-come, 1st-serve
10:00 AM - Aug 14, 2017

Free, 2 p.m., Boston Central Library, 700 Boylston St.

MIT Kresge Oval: Part of the Department of Earth, Atmospheric, and Planetary Sciences at MIT, this event is free and will take place at the Kresge Oval, outside the MIT Student Center. Unlike the sold-out viewing party at the MIT Haystack Observatory, this event is free to for anyone who drops by, and glasses and specially filter telescopes to view the eclipse will be provided.

Free, 1:30 p.m., MIT Kresge Oval, 77 Mass. Ave.

Northeastern University: Held on the Centennial Common, the physics department of Northeastern will provide viewing cards instead of glasses, and a livestream in case of inclement weather.

Free, 1:30 p.m., Northeastern Centennial Common, 30 Leon St.

Boston Harbor Islands: See the eclipse from one of the nearby islands with a ranger and be a part of “citizen science” by documenting changes in air temperature. The glasses are free with every sign up, and the boat lands at 11:30 a.m. to be sure you arrive at the island with plenty of time.

Free with registration, 11:30 a.m., National Park Service & Boston Harbor Now, Spectacle Island

If you can’t make these events, the Harvard-Smithsonian Center for Astro-Physics has developed a free app for the eclipse for both iOS and Android to help you out. Eclipse 2017 has a viewing guide, information on the deeper science behind the eclipse, solar research from the foundation, and a livestream of the event.

bostonmagazine.com

In today’s economy, everyone is pinching pennies. So why worry about umbrella coverage? Shouldn’t a home and auto policy leave you adequately covered?

Unfortunately, we live in a world of lawsuits. Large damages can be awarded, be extremely expensive and have long-term financial impact. Those lawsuits can come from unlikely sources, such as our furry friends.

Take Herschel for instance. Herschel is a much-loved, rather timid labradoodle who enjoys taking naps on the driveway while his owner mows the lawn.

Herschel watched from eight feet away as his neighbor, a 39 year old man, showed off his rollerblading skills to his kids. The man wiped out on the sidewalk in front of Herschel’s house and broke his leg. He required surgery, costing around $35,000 in medical costs and $18,000 in lost wages.

Fair or not, the man brought a lawsuit against Herschel’s owner, suing for $220,000 in damages. He alleged that Herschel had caused the accident by getting in his way, despite multiple witnesses to the contrary.

But Herschel’s owner was lucky--a jury vindicated Herschel. However, lawsuits such as these can easily exceed the limits on a homeowner’s policy, leaving the insured responsible for the remainder. An umbrella policy would prevent that, giving you an extra $1 million to $5 million in coverage.

Our furry friends can put your assets at risk in other ways as well. According to the Center for Disease Control and Prevention, 4.7 million people are bitten by dogs each year, with half of those occurring on the owner’s property. Dog bites, according to the Insurance Information Institute, account for about a third of all homeowner’s insurance claims, which only cover limited damages.

Protect what you love. Call Lallis & Higgins Insurance to talk about your umbrella options.

College is expensive enough without the added cost of unexpected accidents or theft, not covered by your insurance policy. If you have a student heading away to school, below are a few tips to help you get the most out of your coverage.

HOMEOWNERS (varies by state)

Personal Property: Most homeowners policies will cover personal property for up to 10% of your total policy while your child is residing at school (a $100,000 policy equals $10,000 in coverage). Not all types of damage are covered, so read your policy carefully. Some items such as jewelry or expensive electronics, require special coverage. Renters insurance is strongly recommended.

Liability Coverage: General damage to a dorm room or apartment is not usually covered.

Documentation: Creating an inventory of the items your child is taking to school is a good idea. Use photographs and keep receipts.

AUTO (varies by state)

Car Stays Home: Keep your child listed on your auto policy if they will still drive your car while at home on school breaks.

Car at School: Make sure to notify us if your child will be taking a car away to school. In most cases, if the car is registered to you and listed on your policy, it will be covered.

Driving a Friend’s Car: Students are generally covered if they are listed on their parent’s policy and are not regularly using the vehicle. The coverage would be secondary. The insurance for the friend’s vehicle would be the primary coverage.

Discounts: A full-time student meeting certain academic requirements can qualify for a good student discount. Distant student discounts may also be available. Drivers under 21 who have completed driver’s education may also get a discount.

Before your child leaves for school, contact Lallis & Higgins Insurance. We can walk you through the steps to ensure you have the right coverage. We’re here to help!