Direct Insurance is one of those really straightforward things that people tend to over-analyse or view as complex. For the benefit of those who do not know much about it and for the sake of clarification, a brief explanation of direct insurance. As the name implies, direct insurance is insurance without any middle man such as an insurance agent. In other words, it is a direct transaction. Also known as primary insurance or online insurance, it is an insurance in which an insurer is directly responsible to the insured, without involving a reinsurer or an agent. Today, many people have really taken to direct insurance as a result of the growing reliance of the internet and it has been paying off so far.

direct insurance

The internet now gives you a direct access to the insurance providers, so, spending extra sums of money on acquiring the services of agents and middlemen is no longer important. You can get quotes now on your own, do your own analysis and research on your own, and meet up with the final parties to solve all your insurance needs. Call this a case of the internet and better automated systems taking the jobs of a few humans – or something like that. However, as an individual with insurance needs, direct insurance would work just perfect for you. There is direct life insurance, direct auto insurance and many more. Here are some things you, however, need to know about direct insurance.

The Idea of direct insurance

The idea of direct insurance simply springs from the general idea of Insurance. It is still a means of protecting oneself from financial loss, and generally it is a form of risk management primarily used to hedge against the risk of any uncertain loss. The only difference is that it directly places the final customer in charge of meeting his or her own insurance needs. Most direct insurance platforms on the internet simply provide complete car, life, or home insurance solutions directly to the consumer. They simply outline their services on the internet via their websites to help consumers compare and choose insurance plans that suit them. They work for the benefit of consumers and offers free instant quotes. They usually work with location and offer quotes in various types of insurance services.

The insurance providers simply have to offer sound customer service platforms and ultimately make it easier for their clients to have secured access to them. There usually is a good client centre to manage their clients’ health, car, or life insurance needs, and access all the documents and track their claims efficiently. By all indicators, you can tell that direct insurance would be common with the younger generation as they are keen to using the internet for all things business or personal. So if as an insurance company you want to expand your niche to getting more clients generally, going into direct insurance would be worthwhile.

Advantages and Disadvantages of direct insurance

There are some advantages of direct insurance, and there are also disadvantages of it as well. Whether as an individual or as an insurance company, you need to carefully analyse the effect of these and come to a good stand point before making any decision.

Advantages of Direct Insurance

The advantages of direct insurance are numerous. They include:

  • Save time and money
  • Receive reliable information speedily
  • No middleman required, hence, you are not paying commissions and fees to any broker
  • You remain in charge of your portfolio
  • You are given expert advice and sometimes are assisted with on-site survey which highlights risks and risk management options
  • Improve your quality of living
  • Premiums are usually cheaper as quotes for direct insurance are usually competitive
  • Your premium and cover are specifically made to suit your specific circumstances
  • All queries are handled by call centre advisors and agents who are fully trained and qualified
  • No co-insurance clause
  • Ease of accessibility as you can get a quote any day and any time
  • It also saves the insurance company money as the insurance companies are saving money by not having to pay a fee to any insurance agent
  • You have the opportunity to research and compare quotes personally before making your decision

Disadvantages of direct insurance

There are also certain disadvantages of using direct insurance. They are:

  • With no medicals, the direct insurer has no option other than to price higher in anticipation of risks they are unaware of. However, products recommended by an adviser will be fully underwritten at application stage so you are covered
  • Direct insurance essentially offers basic cover without other benefits. Retail products tend to have a wider range of features that can be tailored to your own personal preference and budget
  • An adviser can work with you, and look at ways of paying for your cover via superannuation, and using various linking options that would aim at reducing the overall cost to you as oppose using direct insurance
  • Most direct insurance premiums are funded from cash flow alone and are only tax deductible for the income protection component
  • Direct insurance normally offers no guarantee that a payment will be made, as often these policies are underwritten at the time of claim
  • Having an agent really works in your favour when crisis hits; a good agent will fight for you and get you the money you need from your insurance company
  • If you need a custom plan you often have to rely on a call centre representative who may not provide required information and advice
  • Direct Car Insurance will not be an advantage to those who can benefit from a slightly more quality insurance plan as part of a professional network
  • It should be reconsidered for people who may run the risk of losing valuable resources

After evaluating these advantages and disadvantages and you still want to be a part of direct insurance, here are some of the coolest ones you can get quotes from:

  • Hartford
  • Progressive
  • Esurance
  • Geico
  • USAA

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