Every homeowner has been there. You are sitting across the desk from your mortgage provider signing an endless mountain of forms and papers for that new place you look forward to calling “home.” You are flipping through the pages and somewhere in the stack will be a form asking if you would like to purchase property insurance through the bank, and they promise that it will be as easy as 1,2,3. However, you are hit with a moment of hesitation that asks “is this the best choice?” Rattling in your brain, between the regions of convenience and responsibility, the argument ensues – “Do I just sign the form to get it over with, or should I check my options?” This existential conflict leaves you in limbo for a few moments while your pen hovers above the line. Suddenly your train of thought is derailed by that oh-so-pleasant bank employee asking you if you would like to purchase home insurance through the financial institution.
Should I? Should I not?
Of course there will be no surprise at my bias when the recommendation I give is to refrain from signing. Why? Well, a couple reasons really. First of all, I am reminded of the wisdom my parents shared with me which encouraged me to shop around, and to not take the first offer in any deal. All too often a person can save money and find better value by being patient, looking, and doing some due diligence. I know what you are thinking: “Shopping around my insurance is a huge pain, and I just want to get it over with!” This leads me to my second point, which is – Do you think it is a coincidence that the banks are asking you to purchase insurance products in a quick moment like that? No, banks know what they are doing, and they know that the best chance to gain your insurance portfolio is to offer it on the spot, in the moment when you are feeling the excitement of the deal, and the desire to avoid any further work prior to possession. I would encourage you not to play their game. Not to take away from a banks credibility in handling your finances, they just haven’t been in the insurance industry long enough to know how to handle your insurance portfolio.
In my career as a broker, I have seen many customers come to me with insurance documents issues from a bank. They are frustrated that their mortgage officer can’t answer their insurance questions, and when they push for an answer they get redirected to a call-centre. Further, when it comes time to add that new boat or ATV or some other item, to a policy, the recurring answer I have heard people get is that they need to insure those items elsewhere. In short, the transaction of taking your premiums is made easy, while getting the service on what you have purchased is not so easy.
With an insurance brokerage you have a dedicated person that is there to talk about your insurance needs. They are a licensed individual that is familiar with many insurance products, not banking products. An insurance broker has a vast array of insurance products that can cover most, if not all, of your insurance needs.
The clincher though? Brokers carry E&O insurance. This means that if a mistake was made on your policy, or if there is an omission of coverage, a broker has insurance backing the transaction so that an error can even be covered from time to time.
Brokerage or Bank? It’s your choice, but now you know a few more reasons why to consider a brokerage. Don’t let the bank pressure you. You are in the driver’s seat of your insurance needs. Grab the wheel and make the choice that is truly best for you!