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Your Primer on Insurance Brokers

Insurance brokers guide you through the process of purchasing insurance by identifying risks and providing tips

by Forma on

October 3, 2019

What are Insurance Brokers?

Insurance brokers are professionals who sell various types of insurance coverage to clients. Auto, home, health, life, property, and other varieties of insurance all fall under this umbrella. Some insurance brokers work independently and others work for brokerage firms; some deal with individuals, and some elect to work only with businesses.

An insurance broker's job is to help inform clients of how best to handle risk management. They help make it possible for individuals and companies to obtain and provide insurance for themselves, their families, their property, and their businesses.

Within the UK, brokers are regulated on the state level. They're often required to hold a specialized license that can only be obtained after completing education and testing requirements. The information they learn during the period prior to certification allows them to guide clients and answer their questions without trouble. Brokers seek to help clients understand their liabilities and how to manage those risks most effectively.

Advantages of Using an Insurance Broker

The work is personal and unbiased

Because brokers work for you rather than for an insurance company, you don't need to feel anxious about hidden agendas or rushed service. They aren't tied down to a single insurance company like a captive agent would be, which means that they have a much wider pool of options to present to you. Your agent can assess your personal needs and look to multiple companies for the optimal solution.

Consolidation

When you choose to use an insurance broker rather than going through a company to purchase insurance, you can leverage a unique benefit-- you can secure all of your insurance through one broker and keep paperwork and stress to a minimum. No matter what sort of insurance you need or may obtain in the future, there's something to be said for working with one broker and having all of that information in a single place.

Improved pricing

Broker pricing has been shown time and time again to be a more favourable option than direct insurance pricing. Most insurance companies offer brokers lower rates that they can pass onto their customers; this is because businesses and individuals who choose to purchase policies through brokers are inherently lower-risk than those who go into the situation alone. Insurance companies know you'll leverage the broker's evaluation skills, which means you're less of a liability.

In addition to the above benefits, brokers:

  • Have access to a variety of products from most insurance markets
  • Can represent clients during claims settlements
  • Are regulated by the Financial Conduct Authority
  • Offer risk management advice
  • Identify, manage, and control risk
  • Offer clear information, answers, and documents
  • Hold their own professional indemnity insurance, which improves consumer confidence

Eligible customers are also protected by the Government-backed Financial Services Compensation Scheme, which ensures that they can receive compensation in the event that a broker cannot pay claims against it.

How to Use an Insurance Broker

Working with an insurance broker is as simple as finding somebody with the right qualifications who's a great match for you personally. There are insurance brokers aplenty in just about every city in the UK, so you'll have your pick of a wide variety of candidates.

Begin by asking family, friends, and other trusted individuals for their recommendations. This will give you a springboard into the process of actually selecting your broker. From here, you can do deeper research on suggested individuals. Try to find brokers who:

  • Have plenty of experience procuring insurance for exactly what you need it for
  • Have extensive positive testimonies and references from previous clients
  • Are well-equipped to support you in the event of future claims
  • Demonstrate deep knowledge of the risks you may face

Once you've selected a broker and gotten to work, you'll need to be clear about your concerns and what sorts of coverage you think you may need. Pay careful attention to the information and opinions your broker gives you after this point; your thoughts matter, but your broker has been through extensive education in order to learn what's best for you.

Don't be afraid to ask questions, seek clarification, and look for second opinions. Your broker may be better-versed in the world of insurance than you are, but that doesn't mean you need to be a doormat. Look at your broker as a partner rather than a pesky authority figure, and you'll be well on your way to protecting what matters to you the most.

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