Insurance can be bought either:
- directly from the insurance company (either over the counter, by phone or increasingly via the Internet), or
- through an intermediary e.g. a broker
Buying through an intermediary
A number of different types of intermediaries sell insurance. These include:
Insurance brokers
Insurance brokers will generally be acting as your agent, not the insurer’s agent (there are some limited exceptions, depending on the facts).
This means that your remedy is against the broker, not the insurer, if you suffer a loss because, for example, the broker did not arrange cover against the risks you wanted, or delayed in obtaining the insurance.
Is your insurance broker registered?
If you are using a broker to arrange your insurance, you should check that they are registered with the Australian Securities and Investments Commission by searching the professional register for brokers on its website.
If the intermediary is not a broker
Most other intermediaries are considered to be agents of the insurance company, not the insured. This means that:
- anything you tell the intermediary is treated as information disclosed to the insurer
- the insurance company is bound by statements made by the intermediary.
Getting information
The Australian Securities and Investments Commission has detailed information on its website at http://fido.asic.gov.au , covering:
- how to understand your policy
- how to compare different wording
- important things to consider before buying your policy.
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