Return of the Insurance Broker ; Websites Are No Good at Finding Specialist Policies. Try the Old Route, Says David Prosser

By David Prosser

Remember insurance brokers, that mysterious breed of financial adviser who used to maintain offices on every high street? New technology and the modernisation of the financial services industry were supposed to spell the end for these middlemen, whose job it was to search the market for the best deals on insurance.

Brokers, however, are making a comeback, particularly in the motor insurance market. The launch of insurers that deal direct with the public - the approach pioneered by Direct Line - has failed to kill off the intermediary sector. So has the latest threat - the emergence of online price comparison sites that give you car insurance quotes in seconds at home. Peter Staddon, head of technical services at the British Insurance Brokers' Association (Biba), says: "The private motor industry is worth [pound]5.8bn and brokers now account for a third of all policies."

At first sight, online price comparison services offer the perfect solution if you're shopping around for car insurance. You enter all your details once and the sites search the market for the best possible price. However, there are flaws with the model. For one thing, if your case is at all non-standard, the site's generalised questionnaires won't give you a meaningful quote that you'll be able to convert into genuine premiums.

Far more people are non-standard cases than you might think. The list includes anyone driving a car that has been modified in any way, as well as any imported cars.

Even more significantly, you'll also find it difficult to use online price comparison sites to get realistic quotes unless your driving licence is clean. If you're one of millions of drivers with points on your licence following a speeding offence, for example, the sites won't produce a useful result, because most insurers won't quote online for such cases. Given that 2.2m speeding convictions were handed out last year, a huge minority of drivers are effectively barred from using the internet to shop around for cheaper insurance.

To add insult to injury, if you are a non-standard case, it's actually more important to scour the market for the best possible deal, because insurers have such different policies on who they want to cover and how much it will cost. Some insurers charge no additional premiums for drivers with one speed camera conviction, but raise prices sharply for two or more offences. Others rack up charges on the first offence.

The same is true of other non-standard risks. Most insurers won't even consider applications for cover for non-standard cars, or vehicles that have been modified. Those general insurers that do cover such risks are likely to charge far more than specialists in this market.

Even young drivers can be caught out in this way, because only a minority of insurers are interested in their business. Searches on price comparison sites won't capture the deals offered to young drivers, such as Norwich Union's pay-as-you-go policy. Staddon also argues that buying motor insurance on the basis of price alone can be a false economy. Brokers, he points out, have a relationship with insurers that means they understand the intricacies of each compa- ny's policy - and they can act as your advocate when you make a claim.

Typically, a broker has a relationship with some, but not all the insurers in the market. For this reason, Biba suggests getting quotes from three separate brokers. Brokers charge a commission - typically 10 per cent of your premium - but they must be open about the costs.

"Brokers particularly come into their own when you need someone on your side to deal with an insurer," Staddon says. This week alone, one of his members dealt with an insurer refusing to pay out when a driver was pulled from his car by a thief while about to set off on holiday with a fully-loaded vehicle. The insurer initially refused to pay out because keys were in the ignition. "Our mem-ber was able to call the chief executive of the insurer in question direct to insist this wasn't acceptable," Staddon says.

Brokers and price comparison sites don't have to be mutually exclusive. It's worth using the sites to get an idea of what you might have to pay. In many cases, however, a good broker should be able to match these deals - plus you'll get a service too.

Biba: 0901 814 0015, www.biba.org.uk.

'A better service than the internet'

When David Shaw, a solicitor from north London, received his renewal notice from Direct Line, he was shocked to discover a 10 per cent increase in his annual premium. Despite having five years of no- claims bonus, the insurer wanted more than [pound]630 to insure his Skoda.

"I've been meaning to shop around for a better deal for the last few years, but I've never quite got round to it," David says. "This time, I was determined to see if I could save money, so I logged on to two internet sites I've seen advertised."

Unfortunately, neither Insuresupermarket.com or Confused.com were able to give David a full range of quotes. While his details were relatively standard, David has six penalty points on his licence, following two speed camera offences in the past three years.

"This seemed to take me out of the net as far as online price comparison services went. In the end, I decided to approach a broker to do the work for me." James & Browne, a Coventry-based firm of insurance brokers, were able to use their technology to get quotes from a panel of car insurers. They saved David around [pound]30 on his car insurance.

"The saving wasn't that huge," says David. "But this was the first time I'd ever used an insurance broker - I found it far easier than using an internet-based service."

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