car insurance renewal- please explain!

ok can anyone explain to me how this is allowed......

i received my car insurance renewal from the broker, it is approx 450 euro. in the documents they sent me, is the original quote from the insurance company, which is approx 370 euro.

I then got a quote directly from the insurance company for approx 560 euro.
When i spoke with the company, the say they have different rates for brokers & private individuals.

considering that they are willing to insure me, on my vehicle, with all the same conditions for 370 if I get the policy through a broker, then why can't they insure me for the same amount, if I shop directly with them?

they are insuring the same person, the same vehicle and all the same conditions.
can someone please explain to me how this is allowed?

Geuze

Price discrimination is perfectly normal, and common.

All sorts of pensions, life insurance, etc. are sold through different channels at different prices.

Some insurers will have special rates for some brokers.

Geuze

Geuze wrote: »

Price discrimination is perfectly normal, and common.

All sorts of pensions, life insurance, etc. are sold through different channels at different prices.

Some insurers will have special rates for some brokers.

But how is that allowed or even legal?
If an insurance company can insure me for 370 Euro then that's the price of the premium surely?
How could it possibly make sense that it is cheaper for them to insure me if I use a broker?
The policy is the same, the risks are the same!

wally79

bubblypop wrote: »

But how is that allowed or even legal?
If an insurance company can insure me for 370 Euro then that's the price of the premium surely?
How could it possibly make sense that it is cheaper for them to insure me if I use a broker?
The policy is the same, the risks are the same!

The broker is like a bulk buyer so gets a discount

pablo128

They do a bulk discount for brokers. Sometimes the broker will pass on a bigger than normal discount. I have figured out over the years that they sometimes charge more than the main company. There's no rhyme or reason to it.

Eggs For Dinner

bubblypop wrote: »

But how is that allowed or even legal?
If an insurance company can insure me for 370 Euro then that's the price of the premium surely?
How could it possibly make sense that it is cheaper for them to insure me if I use a broker?
The policy is the same, the risks are the same!

Different distribution channels will also have different obligations to the insurer. Many will carry a high degree of administration normally undertaken by the insurer, including claims handling.

But the actual product is the same. The insurance policy does not change, whether I buy it direct or the broker gets it on my behalf.
The insurance company have said that my premium for the next year is 370 Euro. That is the cost of the premium, after all risks taken into account & any discounts applied.
But when I try to but direct from them it is approx 200 Euro more expensive.
So it is the same product at 2 different prices.
It can't be right!

Eggs For Dinner

It's been explained to you

artanevilla

You can go into two different shops, and the same product is two different prices. That's what's happening here.

Senature

This happens with almost anything you buy.

A travel agent will pay less for a flight or hotel room than if you book it directly.

What you buy in any shop is sold to the retailer for less than the price you pay for it...

Geuze

bubblypop wrote: »

So it is the same product at 2 different prices.
It can't be right!

Every seat on a plane could be sold at different fares.

Same goes for a train.

Same for hotel rooms.

To make a telephone call pre or post 6pm could be a different price.

Unbranded butter is the exact same butter as branded butter, just with a different wrapper = different price.

That's price discrimination.

Geuze

Geuze wrote: »

Every seat on a plane could be sold at different fares.

Same goes for a train.

Same for hotel rooms.

To make a telephone call pre or post 6pm could be a different price.

Unbranded butter is the exact same butter as branded butter, just with a different wrapper = different price.

That's price discrimination.

yes,
I do understand different prices for different services.
My issue here is though, insurance premiums are based on certain circumstances, as in my age, sex, driving experience, previous claims etc etc
so, basically if the risks are worked out so that the premium is 370 euro, then surely that is the price of the premium?

The J Stands for Jay

bubblypop wrote: »

yes,
I do understand different prices for different services.
My issue here is though, insurance premiums are based on certain circumstances, as in my age, sex, driving experience, previous claims etc etc
so, basically if the risks are worked out so that the premium is 370 euro, then surely that is the price of the premium?

The post you quoted gave plenty of examples of the same service at different prices.

The quote of 370 is for the underwriting of the risk. The broker ads on their costs for you to pay. Going directly to the insurer is a higher price because there is no bulk discount, as well as the insurer is picking up the cost of admin that the broker would otherwise do. For example, they need more call centre staff for direct customers than brokers.

Kaldo

Brokers usually do the sales function too. Insurers usually do not have sales so you acquire your car insurance policy through their site.

On the other hand, brokers usually are the first shield's resistance in case of you're doing any claim. This is a way to protect the insurer too.

jimmycrackcorm

bubblypop wrote: »

yes,
I do understand different prices for different services.
My issue here is though, insurance premiums are based on certain circumstances, as in my age, sex, driving experience, previous claims etc etc
so, basically if the risks are worked out so that the premium is 370 euro, then surely that is the price of the premium?

No it's higher. But the company can offer a discount to the broker to encourage more business.

Like the slab of Guinness I got in SuperValu for 20 euro, yet individual cans are 2 euro each.

Henry Ford III

There's an insurance area within boards where this might get better addressed.

p.s. Differential pricing through different distribution channels for identical products is widespread in a whole manner of businesses.

Jim2007

bubblypop wrote: »

considering that they are willing to insure me, on my vehicle, with all the same conditions for 370 if I get the policy through a broker, then why can't they insure me for the same amount, if I shop directly with them?

Because you don't bring them anything like the amount of business a broker does.

bubblypop wrote: »

But how is that allowed or even legal?
If an insurance company can insure me for 370 Euro then that's the price of the premium surely?
How could it possibly make sense that it is cheaper for them to insure me if I use a broker?
The policy is the same, the risks are the same!

You don't get to buy discount at the cash and carry either, you have to go retail, no different to any other business.