'Broker fee' applied to insurance policy renewal

I've just received my annual IP insurance policy renewals, and there is a 'broker fee' applied (almost $60 on one policy and almost $30 on the other policy).

I can understand that if it was the first year of the policies, and a broker had set it up for me, that this may be a form of payment/commission to the broker. However, this now appears to be more like a 'trailing commission'.

Is this standard? Acceptable? Mandatory to pay?

 

Good question. I have it too. Who are you with

 

If that is part of the agreement the broker had with the product provider then yes its acceptable.

 

But should the customer be charged an extra fee for an agreement between the insurer and the broker?

 

Probably not, I thought it was referring to a built in trail.

Call/email your broker to request a "please explain"?

 

It's called disclosure.

The amount you pay is detailed. As well as commission, it should also tell you how much you pay for any levies or GST.
Marg

 

EBM

 

The thing is, I first went with the insurer based on a recommendation/pass over from a BA (not sure if they have some form of commission agreement), but for the second IP, I dealt with it entirely on my own (so there was never a third party remotely related to the sign up etc).

 

I don't think you should be paying this fee. If a referral is made to company X from any source then company X should be sacrificing their margins in return for business they otherwise would not have received. There is nothing wrong with commissions but a) they should be disclosed; and more importantly, b) they should not inflate the "off the street" price that the consumer pays.

 

Is it 'extra'?

 

Yes. In the breakdown of all the 'little bits' that add to the total premium value, there is a cost for 'broker fee'.

 

Indeed. But have you confirmed with the insurance company that it's possible to remove it and the premium would then be cheaper?

Brokers and financial planners get paid commission, out of the profits. But if you approach the bank directly it's no cheaper. The profit is the same to the company it's just allocated to another area of the bank.

 

I'm actually going to send an email today - trying to find out if the fee can be removed.

 

Is it because QBE are the underwriters of the EBM policy & as such they act as 'brokers' for your policy?

 

Go to QBE and see if their identical cover to EBM is $60 or more cheaper. I dare say it wont be as you are buying 1 policy and EBM are originating hundreds of thousands.

EBM arent an insurer they are a broker with a specialty landlord package they have created with QBE.

 

I think this is just disclosure. How else does the broker get paid - they do the work? You should shop around and if you find something better go with it.

 

Does QBE offer the same policy directly? First I've heard of that.

 

Hi @KayTea

Another explanation could be because your managing agent (ie property management company) is noted on the policy... often if the managing agent is noted on the policy and happens to be registered as a referring body, they receive a referral fee or commission.

EBM sprung into popularity about a year ago when they started offering attractive flood cover as standard within their policies.

 

Precisely. Its a speciality package that QBE dont offer as a direct product.

 

The emailed response from EBM is: