Anyone buying insurance should first weigh the benefits of each method of purchasing insurance before going ahead and buying insurance. There are three major channels you can get insurance from that is direct, agents and brokers. I'll explain the difference between these so you can understand them better and that will help make an informed decision
Direct
Buying direct means you go directly to the insurance companies and buy from them without anyone else being involved. You can do this by either walk in to their offices, contacting them via telephone or email. There are about 25 direct insurance companies in Zimbabwe. The common names are Nicoz Diamond, Old Mutual, Zimnat, Credsure etc.
Agents
There are two types of agents which are:
Tied Agent
This is a 'middleman' between you and the insurance company. Tied agents sell insurance for only one specific direct insurer for example they can only sell exclusively for Old Mutual.This means that they work directly for the insurance company and every policy they sell they give it to a specific insurance company. There are many tied agents around the country that sell insurance at post offices, banks, service stations and supermarket.
Multiple Agent
Unlike the tied agent this type of agent can sell insurance for more than one insurance company. The agent works directly with the client to allow a better search and choice of the best insurance company. However that does not mean that they have access to all types of policies from all insurance companies. Whereas a tied agent is a representative of the insurance company, multiple agents represent both the client and insurance company.
Brokers
More like the multiple agent, brokers search for the best policy for the client from different insurance companies. They are usually bigger in size than agents and therefore they usually give better advice than agents. They also have better knowledge of offerings from different insurance companies. However they represent only the client and not the insurance companies.
Why you should not buy direct
There are things which you can do on your own but buying insurance is not one of them. Insurance contracts have a language that can be confusing to a layman. Terms in insurance change every year and when you don't have anyone to alert you about this, this could lead you to you making the wrong decisions. You will never know about other better deals if you go directly or if you use a tied agent. Unless you have inside information on all insurance companies or unless you have thorough knowledge of the insurance industry it is not advisable to go direct
Why you should use a multiple agent or a broker
Multiple agents and brokers are usually focused on your unique needs as their client. They help you with comparison shopping and zone in on the best prices and terms from different insurance companies according to your different needs. They also give you advice on best practices to reduce your losses and also to get your insurance premiums down. They have a broader understanding of insurance companies offerings and key benefits because they work with a variety of insurance companies. With these you get a more personalized experience where you can also be assisted with lodging your claim. In the event that your claims is disputed by the insurance company multiple agents and brokers represent you to the insurance company. Because brokers and multiples agents offer big chunks of business to insurance companies they at times get discounted rates or they negotiate lower rates for their clients which you can not do when you go directly to insurance companies. The best part for using these intermediaries is you don't have to pay them for their services. They get paid on commission by the insurance companies .
Let me know how you buy your insurance