Insurance for real estate agents

Real estate agency is a light occupation in insurance terms. The main physical exposure is time behind the wheel, and the rating reflects that. The difficulty is financial rather than physical: a commission-only income that swings with the market, the listing cycle and your own pipeline.

Insurers deal with variable income by averaging. Depending on the wording, an income protection benefit may be calculated on the best twelve months of the last two or three years, or on an average, or on an agreed figure fixed at application. Which of those applies makes an enormous difference to an agent who claims after a soft year, and it is decided when the policy is written rather than when the claim is made.

It is worth being blunt about what income protection does not do. It pays when illness or injury stops you working. It does not pay when the market stops. An agent whose income halves in a downturn has a business problem, not an insurance claim, and no policy in New Zealand covers it. Anyone suggesting otherwise is selling something else.

The third feature is contractor status. Agents typically work under a licensee as independent contractors. There is no sick leave, no employer cover, and ACC entitlement is calculated from filed liable earnings unless you have arranged otherwise. For an agent whose income has just come off a lean year, that calculation can produce a weekly compensation figure well below what the household needs.

Two decisions, both made before anything goes wrong, determine what an agent actually receives.

On the private side

Agreed value income protection sets the benefit at application, using financial evidence supplied then. Indemnity cover calculates it at claim time from proven earnings. For commission income the difference is not academic — it is the difference between the figure on your schedule and a fraction of it. Agreed value is not available from every insurer or to every occupation, so it has to be asked for.

On the ACC side

Standard CoverPlus works from your last filed liable earnings. CoverPlus Extra lets you agree an amount with ACC in advance and be paid that amount without proving income. For a self-employed agent with a variable pipeline, that is usually the more sensible setting, and it is arranged with ACC directly.

These are the details that decide whether the cover does what you expected. Read them before you compare on price.

• Whether income protection is agreed value or indemnity, and what period an indemnity calculation would use.
• Your ACC setting, and whether a CoverPlus Extra level would better reflect your real earnings.
• Whether the policy requires minimum hours, and how that works for a self-managed schedule.
• Fixed business costs that continue during an absence, and whether anything covers them.
• Driving exposure — high annual mileage is a rating factor for some insurers.
• If you own or part-own an office, whether shareholder protection and key person cover are in place.

Every New Zealand insurer writes income protection for commission earners to its own wording, and the words are where the money is. Two policies that look identical on price can pay very differently when it matters. Closing that gap is the entire job of an adviser.

• Commission income needs a properly evidenced application, and how it is presented affects the benefit offered.
• Agreed value cover is not universally available, and for commission earners it is worth chasing hard.
• Coordinating a private policy with an ACC CoverPlus Extra level avoids paying twice for accident risk and under-insuring illness.
• Agency principals and office owners have business exposures — key person, shareholder protection — that personal cover does not touch.

There are three ways to buy life cover in New Zealand, and they are not equivalent. You can buy direct from one insurer, which means you see one product range and one underwriting appetite. You can buy through your bank, which usually means a single insurer’s product sold under the bank’s brand, often with narrower definitions. Or you can go through an adviser, who quotes several insurers at once and is required to put your interests first.

The premium you pay is the same either way. Insurers build adviser commission into their pricing whether or not an adviser is involved, so going direct does not get you a discount — it just removes the person whose job is to argue your corner at application and at claim time.

• An adviser can see which insurer is currently taking your health history on standard terms, and which one will load or exclude it.
• An adviser can structure cover across two insurers if that produces a better outcome than putting everything with one.
• An adviser handles the underwriting back-and-forth, and is the person who chases the claim when a family is least able to.
• An adviser has to document why the recommendation suits you, which is a written record you can hold them to.

We are a referral service, not an insurer. We do not quote premiums and we do not sell policies. What we do is put you in front of one licensed New Zealand adviser who can compare the market properly.

1. 1

   You tell us what you are looking at

   The form takes about a minute. Nobody asks for your medical history on a web form — that conversation happens with the adviser, properly, and only once you have decided to proceed.

2. 2

   An adviser calls you

   A licensed New Zealand adviser talks through your situation: who depends on you, what you owe, what you already have in place, and what you are actually worried about.

3. 3

   They compare the market

   The adviser quotes across the major insurers, checks which of them will take your health history on the best terms, and puts the options side by side in writing.

4. 4

   You decide, in your own time

   There is no obligation and no cost to you. If the answer is that you already have enough cover, a good adviser will tell you that.