The insurance industry has definitely made its place in the business sector. New insurance companies crop up with fair regularity and seem to take great delight in confounding the issue of finding the right insurance company for you. Insurance companies specialize in a wide variety of areas such as health, vehicle, life, home insurance, and many more. In order to make life a bit easier, the insurance broker evolved.
What is an insurance broker?
An insurance broker is essentially a go between for the client and the insurance company. They handle all the negotiations and finalising of the quotes. If the agent is acting on behalf of the buyer, then the broker is called a buying agent. Similarly, an insurance broker acting on behalf of the seller is called a seller agent. Basically, the insurance broker is the representative of the company who interacts with the potential clients and current clients with regard to their policies and claims.
Insurance brokers may work on a fixed salary, a basic with added commission or purely on commission. This depends entirely on which company they work for. They may also work for more than one insurance company and, as such, would be able to offer you more than one option for you insurance. A broker will generally not focus on one specific industry and will also allow you to consolidate your insurance under one roof which may make it cheaper for you in the long run.
Why do you need an insurance broker?
Imagine trying to get quotes from each insurance company in each area that you need insurance. Considering that there are so many insurance companies out there each with their own pros and cons and quirks, this would undoubtedly be a time consuming and frustrating task.
By going through a broker, most of this work will be eliminated. All you will need to do is get quotes from brokers who work for different insurance companies and compare this much shorter list of quotes to find the best deal for you. So instead of looking at potentially hundreds of quotes, you will only need to compare a handful of quotes from a select few brokers.
Basic Responsibilities of an Insurance Broker
Insurance brokers are primarily salesmen. It is their job to source new clients for the companies they work for. They need to negotiate good rates for their potential clients and make sure that the terms and conditions agreed upon are honoured by both parties.
It is also the broker’s duty to ensure the credit worthiness of the clients and to collect the rates due by each client every month. The broker is liable to the company for their clients and so the insurance company is certain of being paid each month for clients attracted by the broker. It is the broker who takes the risk when offering insurance to clients.
So, an broker can offer good insurance deals and the opportunity to consolidate all your insurance under one company. They also take care of all claims and other necessary communication between the client and the insurance company.
By John Benson