What Insurance Brokers Are For

The insurance industry has carved itself a rather deep niche in the business sector. With each new insurance company that starts up, the problem of finding the right insurance company that can cater to all your needs becomes steadily more complicated. Some insurance companies specialise in a wide variety of different areas of insurance whilst others concentrate on a much narrower scope of things. Insurance brokers came about to try and make life a bit easier.

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 insurance 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 insurance company who interacts with the potential clients and current clients with regard to their policies and claims.

Some insurance brokers work on a fixed salary whilst others work on commission, still others work on a combination of the two. How they are paid depends entirely on what company they are employed by. Some brokers work for more than one insurance company and as such can offer a wider range of insurance options. Typically, an insurance broker will not focus on one specific area of insurance which makes it easier to consolidate your insurance under one company.

Why do you need an insurance broker?

The task of getting quotes from the hundreds of insurance companies out there is a daunting and time consuming task. Not only would you need to get quotes and compare them to each other, but you would also need to consider the reputation of the insurance company providing the quote.

An insurance broker has already done most of this work for you and would be able to provide you with a comprehensive overview for the companies and their various policy options. All that would be left for you to do is to compare the relatively few quotes from the different brokers and choose one of these. The trick is to select brokers who are underwritten by different insurance companies to get quotes form rather than getting quotes from brokers underwritten by the same companies as they will just be repeating the work of the other brokers.

Basic Responsibilities of an Insurance Broker

Insurance brokers are primarily salesmen. It is their job to source new clients for the insurance 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.

Insurance brokers also check the client’s credit rating and credit worthiness to ensure that they will get paid each month as it is the broker who pays the insurance company on behalf of the client. Thus the broker is a safeguard for the insurance company against unpaying clients. The broker takes the risk on behalf of the insurance company.

So, an insurance 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.

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