An insurance broker is a professional who acts as an intermediary between insurance companies and consumers. Insurance brokers sell insurance, but they do not work for insurance companies. They are qualified specialists in both insurance and risk management. The mission is to guide a consumer through an insurance buying process and help them find an insurance policy for the best rate.
What Are The Differences Between An Insurance Agent And A Broker?
Many people confuse an insurance broker with a broker. However, there are differences between them:
- The first difference is that insurance brokers represent consumers, while insurance agents represent insurers.
- The second difference is that insurance brokers cannot complete insurance sales (bind coverage) while agents can.
- There are certain insurance agents who have to sell specific insurance products, while brokers do not have such requirements.
- Insurance agents do not have a fiduciary duty, while brokers do. This means that brokers play an advisory role in the process.
How Do You Determine If Someone Is A Insurance Broker?
A qualified broker must have a license, and every state has its own requirements for brokers to receive a license in their state.
Also, unlike insurance agents, brokers do not work for any insurance companies – they work for their consumers. The mission is to support consumers’ interests.
Brokers have deep knowledge of all insurance products, especially those that apply to your local market.
What Are The Advantages Of Working With An Insurance Broker?
If you are shopping for insurance, you may want to compare different options to ensure that you are getting the best deal. That is where an insurance broker can help you. An insurance broker will work on your behalf to find the perfect coverage based on your personal insurance needs and budget. Here is a list of reasons why working with a broker is a smart idea:
You Can Save on Insurance Rates
In order to find the best deal for their clients, insurance brokers work with several insurance partners. They assess their clients’ personal needs and make sure they serve the needs of their clients, not insurance companies. Moreover, since brokers have relationships with various insurance providers, they can negotiate insurance rates and get additional discounts. Brokers are not bound to any specific insurance company, so they are not as limited as insurance agents in the number of products they can offer.
Brokers are Professional and Experienced
Insurance brokers deal with a variety of services and products and can recommend you the insurance policies that best suit your individual needs. Since they often have to deal with clients experiencing losses, they are competent enough to guide you through stressful and confusing claims processes. As professionals, they are always ready to answer all your questions and provide the information you need. Brokers often work for smaller companies, which allows them to offer faster and more personalized support. In addition, all brokers are bonded, which means that you, as a consumer, is protected in the event of dishonest conduct.
You Can Get a Tailor-Made Policy
If you work with an insurance company, one of the main disadvantages is that they may sell you a “one size for all” insurance policy. Working with an insurance broker is different because they always make sure you get what you really need. That means that they do not offer you general policies — instead, you can get a unique insurance policy based on your needs.
You Receive an Objective Risk Assessment
When you use a broker, your process of choosing an insurance policy is simpler and much safer. It is the broker’s task and mission to analyze the risks and liabilities that you as an insurance policyholder may face. If you have an objective risk assessment, you can decide what type of coverage you really need. Before recommending you any policy or insurance product, a broker will understand each aspect of your coverage needs. In addition, a broker has access to technology-based tools, so it is easier for a broker to compare insurance options for you.
The Broker Aims to Help You
Regardless of the type of insurance you are shopping for, it is the broker’s duty and mission to help you. Brokers work with consumers in order to determine their needs. They do their best to select the right insurance solutions at the best possible rates. This gives you peace of mind because you can be sure your broker will inform you about all possible exposure risks. The risks that you may not even consider include public liability, employer’s liability, professional indemnity, key-man, business property coverage, credit risk insurance, business interruption, and others.
For example, if you are a business owner and you are looking for insurance to protect your business, a broker will start analyzing your business and your personal situation first. It is your broker’s responsibility and task to evaluate your business and all the possible risks you may face. Then, based on the analysis, the broker will determine the most adequate coverage levels for you. After that, they will offer you the best coverage at the best price. You can find many insurance options without a broker, but you will not be able to determine yourself what coverage is adequate for your business.
Working With a Broker Does Not Cost You Anything
Brokers get paid a commission by insurance companies for selling insurance products. This means that you, as a consumer, do not need to pay anything to a broker for the work they are doing for you.
Brokers are Impartial
Insurance brokers always remain impartial. They provide you with honest advice and opinion that you can trust and count on. There are multiple benefits of working with an impartial broker rather than conducting a self-directed search. These benefits include increased access of the following:
- Lower rates with a better return on investments
- Extensive experience, training, and knowledge in various marketplaces
- An objective and in-depth risk assessment that allows determining the exact coverage needs
- A great choice of the available insurance policy products
- Exclusive and unique insurance products offered by insurance brokers only
- A wider range of insurance companies
You Receive Proper Claims Assistance
Your broker can serve as your personal advocate during a claim settlement process. As a result, you will have peace of mind knowing that you will receive proper claims assistance, and you will know what to do in the event your claim goes awry. You will not have this option if you are working with insurance companies directly because you may have to go to court and even hire a lawyer.
An experienced, licensed, and professional broker is able to settle claims on your insurance policy. Therefore, by working with a broker, you can sure that you will receive an accurate and quick settlement of any claim. This gives you an opportunity to avoid unnecessary legal costs in the future.
You Can Avoid Insurance Shopping Fatigue
Many people like shopping in general, but nobody likes insurance shopping. One of the reasons why insurance shopping is stressful is the time limit you have to choose your policy. If your current coverage is about to expire, you need to find and purchase a new insurance policy as soon as possible. As a result, shopping for insurance becomes really stressful and affects your ability to make informed decisions. After a while, especially when insurance shopping lasts too long, people get tired and are not able to pick adequate coverage. Instead, they may purchase coverage that does not address their personal insurance needs. For this, reason, it is a smart idea to work with an insurance broker who will help make your insurance shopping experience less stressful, easier, and much more enjoyable.
