An insurance broker is simply an intermediary who plays the role of an agent or counselor who sells, promotes, or negotiates insurance for compensation on behalf of a customer. This person acts on the behalf of customers, and they do their best to make sure that their clients obtain the best insurance coverage available at the best possible rates. This is why insurance brokers are often the most important part of any insurance transaction.
What does an insurance brokerage really do? They have a list of potential clients, and they call those potential clients periodically to discuss and gauge their needs and wants. Based on what the broker has heard from other clients, they will then help each client find the right coverage, the right price, and the best service. Brokers essentially act as salespeople for their clients, but their goal is to help their clients get the best policy for the best price possible. Many people don’t realize how much a broker is actually responsible until they accidentally end up with a lousy policy, or until they need the services that the broker provided and the broker does not deliver. Thus, it is absolutely crucial for an insurance broker to always act in the best interests of their clients.
How can an insurance broker be of help to their clients? For one thing, they can give them advice on the best policy for their particular situation. A good broker can tell clients that they should purchase a comprehensive type of insurance coverage for their home, even if they have only $500 to spend. A broker can also tell clients that they should purchase a rider that comes with the insurance policy in order to protect their homeowner’s policy in the event that they are responsible for damages caused by the insured’s property. There are many situations where a broker can save potential clients thousands of dollars on their homeowner’s insurance.
Another important job for an insurance broker is risk management. The job of the broker is to ensure that clients will be able to manage the risks that they are currently facing. For example, if clients are applying for homeowners insurance policies that come with a lot of restrictions and limits then the broker must assess whether the client is underpaying for the policy or whether they are overpaying. The broker must make sure that they are making the clients happy by finding the cheapest policy that still offers enough protection to the client.
Some people question the legality of insurance brokers being allowed to represent more than one insurer. This is a valid point however many states do permit agents to represent more than one insurer. It is usually the state insurance commissioner who decides which carriers will be allowed to advertise in the Brokers’ Manual.
Another benefit of hiring an insurance broker to help you obtain your homeowners insurance is that they will be able to help you find the most affordable coverage. The insurance business is quite competitive and most insurers try to attract new customers by offering specials and discounts. Brokers can find and compare several quotes from various insurers for you and let you know which one is the most cost effective for you. However it is important for you to understand that discounts offered by brokers depend largely on your situation. Some insurers will offer discounts if you pay your premiums in full each month, while others may offer a discount if you have no claims bonus or if you stay with them for a certain period of time.
Insurance Broker commissions can also vary widely depending on the specific company. Insurance brokers working for one particular company can earn up to forty percent of the premiums you pay. Some companies may even allow brokers to receive commissions based on the amount of money they bring in as salespeople. In addition some companies will allow brokers to negotiate on your behalf when it comes to raising your premiums or reducing them.
Insurance Brokers play an important role in today’s competitive industry. They not only help people secure adequate and effective homeowners insurance coverage but they also help clients get general liability coverage, life and health insurance coverage and even group insurance coverage. Insurance brokers can be instrumental in finding you the best deal for your home. Find an Insurance Broker who understands your needs, who is easy to work with and who is honest and straightforward.