Today we would like to talk about the reasons why people change their insurance with their bank, and whether it is the right or wrong decision. How it can affect the service and what advantages can be gained, beyond mortgage insurance.
The banking practice of offering mortgage insurance
Banks have had some difficult years to obtain profitability, which made them start offering insurance: first linked to mortgages, and then contacting customers to offer them alternatives in other policies.
Something that bothers the Insurance Brokers' Associations is the practice of bank staff going into their clients' accounts to see when their insurances are due and, knowing the amount and the insurer, offer alternatives. We find it hard to understand why there is no interest in analysing and investigating this practice, since, in our opinion, it is a practice that is not being investigated, compromises the privacy and confidentiality of a piece of information that we might not want other people to know.
How does this alternative affect my coverage?
To answer this, I think we have to put ourselves in the banker's shoes: their objective is to get the policy to go through with them. To do so, and knowing what the customer pays, is to offer him a price reduction. But does this cost reduction translate into a limitation of the coverage? The reality is that, in many cases, this is the case.
One example: a customer contacts us stating that the bank is offering him a car insurance a 15% cheaper than ours (from 400 to 340 euros). When we ask to be able to analyse the proposal, we see that:
- The assistance offered is the basic default one, limited to 100 km towing, whereas the current one is unlimited.
- They have taken away the replacement vehicle, when it is a car that the customer uses every day,
- The car's extras have not been included, with the risks that this entails in the event of a claim.
Fortunately, this client trusted us, and what was initially a complaint was used to assess the guarantees he had. and in the end did not make the change. But what about all those people who trust the person who serves them at the bank, and switch without taking into account the small print that is so important in insurance?
Does it improve the service I receive when I pass the insurance to the bank?
The trust you place in the bank when you change insurance policies with them, you need to know why. Let's explain: the bank “manager” is a nice person who helps us with our usual bank account transactions. But does he/she also know about insurance, will he/she help me when I have an accident at home, with the steps to take with the loss adjuster, guilds, etc., will he/she proactively check how the renewals are coming along to assess adjustments compared to what the company is proposing?
We will explain the 3 essential services we provide at PIB Group Iberia, and compare it with what happens in the bank:
- SpecialisationWe only deal with insurance, and this allows us to know in detail the differences between insurers and coverages. This allows us to add value from the moment of compare policies, before contracting, as well as afterwards in the event of queries or claims.
- Defence of the insured: Our job is to defend the client when they have a claim. This means that the client notifies us and we get to work with the company to solve the problem, the claim. When you take out an insurance policy with the bank, it is you who must do all these things, as the “manager” who has sold you the insurance policy will not do these things on your behalf, as we do.
- Insurance review: We don't allow the insurer to turn the bill they want on the renewal, but one of our tasks is to keep an eye on how the renewals are coming and try to adjust them. We cannot decide what the renewal price is, but we can put pressure on the company to moderate increases.
Final considerations: what is the best decision for my interests?
We can understand that it is convenient to have your insurance in the bank, but nowadays, if you are interested in having your insurance in an application, we also offer this service so that you can carry your insurance in your mobile phone, with the difference that the service you receive is better.
We have not talked about prices, but here is a link to a news item based on comparative studies, in which we can see how life insurance is between 30-35% more expensive in the bank than with an independent insurer.
If you want to get more for less, we must recommend that you contact a professional insurance broker. Also, don't let them tell you that either you pass them an insurance policy or they will start charging you commissions, since with the rise in interest rates, any bank has stopped charging commissions.
From PIB Group Iberia we will be happy to assist you if you are looking for value for money and good service when you have an incident.
