What to Ask Your Insurance Broker in NZ

What to Ask Your Insurance Broker in New Zealand

Choosing the right insurance broker can save you time, money, and stress. But to get the most out of your relationship, you need to ask the right questions. A good broker acts as your advocate, not just a salesperson. This guide will walk you through the key questions to ask, so you can make an informed decision.

Why Use an Insurance Broker?

Insurance brokers in New Zealand are regulated by the Financial Markets Authority (FMA) and must adhere to the Financial Advisers Act. Unlike direct insurers, brokers work for you, not the insurance company. They can compare policies from multiple providers, help you understand complex terms, and assist with claims.

Step 1: Understand Their Role and Fees

Before you sign anything, clarify how the broker operates and what you’ll pay.

  • Are you an independent broker? Some brokers work for a single insurer, while others are independent. Independent brokers can access a wider range of products.
  • What are your fees? Brokers earn commissions from insurers, but some also charge a service fee. Ask for a full breakdown of any costs you’ll pay directly.
  • Do you have a disclosure statement? By law, your broker must provide a disclosure statement outlining their services, fees, and any conflicts of interest.

Step 2: Ask About Their Experience and Specialisation

Not all brokers are the same. Some specialise in home and contents, while others focus on business or life insurance.

  • How long have you been a broker in NZ? Experience matters, especially with local insurers like IAG, Suncorp, or Tower.
  • Which insurers do you work with? A good broker should have access to a broad panel, including major NZ providers and niche insurers.
  • Do you have experience with my type of insurance? If you need landlord insurance or a high-value home policy, you want someone who understands those risks.

Step 3: Clarify How They Compare Policies

A broker’s value comes from their ability to compare policies effectively. Ask these questions to ensure they’re thorough.

  • How many quotes will you get for me? Some brokers only approach 2-3 insurers. Ask for a minimum of 3-5 to ensure you’re getting a fair range.
  • What factors do you compare? Don’t just look at price. Ask about coverage limits, exclusions, excess amounts, and claims processes.
  • Do you use a comparison tool? While tools exist, a good broker should also use their knowledge to spot differences in policy wording.

Step 4: Discuss Policy Exclusions and Limits

Insurance policies are full of fine print. Your broker should explain what’s not covered.

  • What are the main exclusions for this policy? For example, home insurance may exclude earthquake damage from certain older homes, or contents policies may have sub-limits for jewellery.
  • Are there any caps on claims? Some policies have limits for specific items like laptops or bicycles. Ask if you need to schedule high-value items separately.
  • How does the excess work? A lower premium often means a higher excess. Ensure you’re comfortable with the amount you’d pay out of pocket.

Step 5: Understand Claims Support

The true test of a broker is how they handle claims. Ask these questions upfront.

  • Will you help me with the claims process? Some brokers just sell policies and leave you to file claims yourself. Others will handle everything on your behalf.
  • What’s the average claims turnaround time? While brokers can’t guarantee exact times, they should know typical timelines for different insurers.
  • Who do I contact if there’s an emergency? Make sure you have a 24/7 claims number, not just your broker’s office hours.

Step 6: Review the Policy Document Carefully

Your broker should walk you through the policy wording, not just hand it over.

  • Can you highlight the key sections? Ask them to point out the schedule, definitions, exclusions, and claims process.
  • What happens if I need to cancel? Understand the cooling-off period and any cancellation fees.
  • Is there a ‘duty of disclosure’ clause? In NZ, you must tell your insurer about any material facts that could affect your risk. Your broker should explain this clearly.

Key Concepts to Understand

Term What It Means
Excess The amount you pay towards a claim before the insurer covers the rest.
Sum insured The maximum amount the insurer will pay for a covered loss.
Indemnity value The replacement cost minus depreciation (common for contents insurance).
Material fact Any information that could influence an insurer’s decision to offer cover or set a premium.
Cooling-off period A set time (usually 14 days) after purchase when you can cancel for a full refund.

Tips for Getting the Most Out of Your Broker

  • Be honest about your situation — hiding information can void your policy later.
  • Ask for a policy summary — many insurers provide a plain-English version alongside the full wording.
  • Review your policies annually — your needs and the market change. A good broker will suggest a review each year.
  • Check the broker’s FMA registration — you can verify their status on the FMA’s Financial Services Register.

Asking the right questions can turn a confusing insurance purchase into a straightforward decision. A good broker will welcome your curiosity and provide clear, honest answers. If they dodge your questions or pressure you to sign quickly, consider looking elsewhere.