What exactly is Direct Car Insurance? And is it Cheaper?


Direct car insurance is what it really describes, you make all the cover arrangements yourself and buy the policy directly from the Insurance organisation who underwrites the cover.

The advantages of buying 'direct' are that in some cases the premiums offered will be less than if you bought via a middleman, though this is by far the case in most in reality.

Most direct motor insurance companies are able to make savings in commission and data handling, which many do pass onto their customers in discounted premiums or advertising 'tempters' such as offering year cover for the price of ten, or throwing in some additional cover for free, such as car breakdown insurance.

These marketing sweeteners should always be looked at sceptically by a prospective consumer of insurance, as it may well function as the case that the costs of the 'sweetener' are absorbed elsewhere in the quote offered.

With several types of motor insurance distribution points available these days it is sometimes difficult to determine whether you are purchasing your cover from a direct company, or not.

You can purchase car insurance by either picking up the telephone and dialling a company that you found in phoning book, visiting a high street outlet, or by shopping on the internet where you have access to many types of car, auto and motor insurance retail distribution products.

Whichever method you determine to purchase, it can be difficult to determine from the starting point, whether you are dealing with a primary insurance company or one of the many other intermediaries which exist.

The types of insurance intermediaries which exist within the UK insurance market these days are numerous but can broadly be thought as belonging to one the following groups:

Underwriters, Direct Companies, Insurance companies, Scheme Providers, Brokers, Comparison websites, Agents, Introducers, Affiliates and Affinity Groups.

Those at the top of the group are those most likely to end up considered direct suppliers of car insurance.

Those towards the bottom of the list are those that are likely to charge a commission, agents, or an introducer fee.

To understand and benefit from purchasing direct from an insurance organisation we need to look at the goods and services given by each of these above groups and how they are components of the price you pay as a premium.

As with all insurance, the ability of the pencil, that is the capacity to set an amount for a risk, ultimately lies with the underwriters of the car insurance policy. These are the people that will suffer financially should you make a claim. Underwriters manage your risk and set the rates and charges. It obviously follows then, that the closer to to the source or base risk that you purchase your car insurance from, a lot more likely it is to be able to get the cover at perfect price for the risk.

It is possible to directly negotiate an amount for a policy with certain motor insurance underwriters. However this task is usually carried out by a specialist insurance professional, and in practice this negotiation is probably best left to a specialist broker who is skilled in communicating risks to underwriters or car insurance companies, and does so as part of his or her job on a daily basis.

Similarly the ability of the underwriting pencil is available to certain sales teams of Direct insurance companies. If you phone them up and talk to them direct, it's possible that even though they have to follow a screenplay and set system screen procedures, they may have some system codes to discretionally discount your insurance premium down to a fixed minimum premium level. It's a question of don't ask -- do not get!

Car insurance schemes are tailored unique policies for a certain type of driver or car such as Lady drivers insurance. Schemes may be offered direct from an giving insurance company specialising in motor schemes, or more likely from a specialist car insurance company or broker. Because the schemes have been designed for a certain distribution funnel the company offering these insurance schemes is often given the ability of the pencil and allowed to make underwriting and pricing decisions themselves, within certain pre-arranged limits of authority.

Often overlooked by the large the main car insurance buying public, these schemes offer the best affordable if you are lucky to fit into one.

If you buy direct from a broker it is most likely they may have an underwriting contact at an insurance company who can vary premiums and match quotes that you have purchased from another source. The advice that car insurance brokers offer is often worth small additional premium they might charge, as they will help you get the correct level of cover and more important communicate any claims or problems you might be having direct to the underwriters of your insurance policy, saving you time and money in what can be a minefield to the insurance world uninitiated. young person car insurance

The large Insurance comparison websites that you usually see advertising on TV, sell policies on behalf of insurance companies and brokers. The majority of these companies do not need the pencil, and are prohibited to discount premiums. Many do however offer and present an extensive choice of insurance policy to a prospect and through the ability to compare rates for mainstream car insurance, are usually able to offer policies which are cheaper than what a customer may currently be paying.

Beware when you are comparing policies online that you are comparing not just on the premium price estimated, but also take account of the variations in numbers of cover, and only compare on a like for like basis. To completely understand the numbers of cover it is essential that you always read all the facts of these policies. Unfortunately in the case of Internet comparison sites that do not underwrite themselves, it is often the case that there are additional premium nature hikes when you come to complete, often created by the contract fulfilling underwriting insurance company, to the original quote offered. This practice known as 'after loading' occurs when you arrive at the underwriting company's site to complete the transaction the price has increased considerably from that originally being estimated.

However you may purchase your car insurance, it should always be with what is right for your specific circumstances and your particular car, in mind.

You should always make comparative decisions on a like for like basis. If one policy on offer a few hundred cheaper than the usual rival, you should check carefully the numbers of cover in all the facts, and compare the limits of indemnity.

Check also which covers are included in the basic cost of the motor insurance policy and which are included as extras. Dashboard or windscreen damage cover is an example of this. You may not require a politeness car when you are a two car family? This extras can soon mount up.

If you need advice or assist in deciding what covers you require, you should always call a dealer or insurance company direct and they will be able to explain exactly what they are offering and allay any fears and insecurity you may have the insurance that they are offering.