Back in May this year we published an article that compared the option of using an insurance broker with going direct to an insurance company.

You can read the original article here, but our basic (and perhaps slightly biased) conclusion was that tradies are better off using a specialist trade insurance broker for their insurance.

Today, the respected industry magazine Insurance Business published figures from the Financial Ombudsman Service which further demonstrate the benefits of using a broker.

What is the Financial Ombudsman Service?

The Financial Ombudsman Service (FOS) is an independent service which helps to settle disputes between consumers (including some small businesses such as tradies) and providers of financial and insurance services in Australia.

If you have a complaint about a finance or insurance company or feel that you have been unfairly treated, you can lodge a complaint with FOS who have the power to investigate and resolve such matters.

It’s also worth pointing out that FOS is a free service for consumers.

The Figures

The 2011-12 review released by FOS shows that a total of 25,298 complaints were lodged against finance and insurance businesses during the year.

Of those complaints, here’s how the numbers break down:

  • Banks – 12,210
  • General insurance companies – 7,591
  • Financial advisers / planners – 949
  • Life insurance companies – 851
  • Debt collectors – 794
  • Non-cash payment providers – 433
  • Investment fund managers – 375
  • General insurance brokers – 123
  • Life insurance brokers – 13

We can see from these figures that general insurance brokers make up a tiny amount of the overall complaints.


Why would you go direct to a general insurance company (which had the second highest number of complaints) when you could use a general insurance broker?

It’s also worth noting that general insurance brokers had far fewer complaints than other industry professionals such as financial advisers and fund managers.

Our Opinion

We believe that these figures just go to show how much better off a tradesman can be by choosing to use an insurance broker rather than going direct to an insurer like AAMI or NRMA etc.

Sure a policy though an insurance broker may be a few dollars more expensive (although they can also often be cheaper), but for the added service you are getting it is definitely worthwhile in our opinion.

We’ve heard numerous stories about tradies being treated poorly by the direct insurance companies. When you use an insurance broker however, you have someone on your side who knows what they’re doing and will fight for the best result for you.

To find out more about how a tradesman insurance broker could help you and your business please get in touch with us.


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