Insurance one-stop shops are not for everyone

Just like with other financial products and services, sometimes having a one-stop shop for all your insurance needs can be kinder to your wallet, not to mention save you time organising products. But does multi-policy insurance always make sense? Canstar weighs up the pros and cons.

You know how health hubs are becoming more popular? You’ve got a dentist, doctor, pharmacy and physiotherapist in one convenient location? You can think of bundling your financial products a little like that. Having your car insurance, home and contents insurance and maybe even life insurance with the same provider can certainly save some set-up and coordination time. If you’re lucky, you should even be able to save some cash, too. But what should you consider before you put all your insurance eggs in one basket and take out multiple policies with a single provider? Canstar explores the pros and cons:

The benefits of insurance packages:

  • The more policies you take out with a single provider, the greater the discount you should be able to secure. Most insurance providers offer group policy discounts, with some up to 20%.
  • Less paperwork. Because insurance involves so many different contracts, product disclosure statements and forms to sign, streamlining all your insurance with one provider can cut down on the administration, and make managing your accounts less complicated.
  • If you need to make multiple claims, for example if both your home and car are damaged during a break-in, it can be easier to deal with a single provider. This can be especially helpful at a time when your stress levels are likely to be running high.

The disadvantages of insurance packages:

  • You may find that a provider has a particularly good deal on one type of insurance, but another of their insurance products is considerably more expensive, even after any multi-policy discount. If this is the case, you could end up paying the same, or even more, than if you had individual policies from different insurers.
  • The same goes for service (because the best insurance is not all about the cost). You may find that a provider has top-notch service for one particular insurance category, but falls a little short in other categories. You need to consider whether you want to compromise one good product for one less-than-average product.
  • A general rule of thumb for investing is that diversification is a form of protection. That means, should one of your investments go belly up, at least you have options elsewhere. This same theory could potentially come into play with insurance products. If something happens to a provider that you have all your policies with, the impact could be greater than if you held different policies with different providers.

However you decide to group your insurance, do your research

The more educated you are about all the options available in the market, the more informed your decision will be. It’s also key to remember that price, while important, is not the be-all and end-all. Value is the keyword. Sometimes, the cheapest option may be your best choice. Other times, paying a little more can be worth a whole lot more.

So, how can you find out about others’ experiences with insurance providers in the market? Canstar surveys New Zealanders to find out their level of satisfaction with providers in the following categories: car insurance, home and contents insurance and health insurance. Hit the links to check out our satisfaction surveys, which should help you narrow down your options.

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