What does an insurance broker do?
An insurance broker specializes in insurance and helps clients manage financial risk. Brokers are tasked with being especially knowledgeable about the insurance industry to give the best advice to clients purchasing insurance policies. This individual works on behalf of clients and they provide financial advice that serves the benefit of the client.
Often times, a broker analyzes individual and/or business risks and helps the client determine how to manage these risks. The insurance broker can help clients identify potential risks in their personal life or business that should be covered by insurance and then can work to find clients the best premium on an insurance policy.
Because advising on insurance coverage is central to the broker-client relationship, the client must be able to trust an insurance broker with sensitive financial details.
What is the difference between an insurance agent and an insurance broker?
An insurance agent is typically aligned with just one insurance company and thus will only try to sell that company’s policies, while an insurance broker works with multiple companies, giving them the flexibility to offer the best rate available between those companies. An insurance agent typically makes a fixed salary with the possibility of a bonus based on commission, while an insurance broker’s compensation is almost entirely commission-based.
Brokers should try to work with a wide network of insurance companies to ensure the customer is receiving the best premium on policies purchased. This can help attract customers as the clients understand the broker has the ability to find them the best premium on the insurance policies they need compared to a broker simply trying to make a commission by working with one or two companies.
Why use an insurance broker?
In both business and private matters it is important that you have the right insurance cover. Wrong or inadequate protection can lead to dreadful consequences, thus the right advice makes all the difference and prevents costly mistakes. An insurance broker is a specialist in insurance protection, is independent and has invaluable know-how of the insurance market as well as access to the most reputable insurers available to provide professional and objective advice on identifying and exposing risks and recommend the most cost effective solutions.
What services does an insurance broker offer?
An insurance broker offers a range of services from arranging new covers, insurance quotes, renewals and assists on claims; covering all classes of insurance business be it Personal Lines to Commercial Lines, Marine or Aviation. The broker forms an ongoing relationship with you to acquire all the knowledge required to provide a better service to you.
Is it cheaper to go directly to an insurer?
When insurers calculate their premium rating, this also includes a standard distribution cost. Essentially, this means that whether you use an insurance broker or go directly to the insurer, the price will generally be the same. You should keep in mind that the cheapest price may not always reflect good value. Using an insurance broker may not cost you more and, as far as possible, the broker will help you prevent uninsured losses.
How is an insurance broker remunerated?
Brokers receive a commission (brokerage) from insurers on the business they place with the insurers. The commission normally takes the form of a percentage on the premium paid
What is risk management?
Risk management is the identification, assessment and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor and control the probability and / or impact of unfortunate events.
I’m thinking of taking out healthcare insurance. are pre-existing conditions covered?
A pre-existing condition may affect your health insurance coverage. Most companies will not cover such conditions whilst others may exceptionally accept you conditionally by providing a pre-existing condition exclusion period.