Insurance is a fact of modern life. But for many individuals and businesses, knowing that you need a comprehensive insurance plan is different from understanding what type of insurance you need, how much you need, and the best options for your family, home, or business. For individuals and companies of all sizes, an insurance broker can make your life easier by simplifying the process of buying insurance, while also saving you both time and money.
What Is an Insurance Broker?
An insurance broker is a specialist with expertise in different types of insurance and risk management. Brokers assist both individuals and business clients in finding insurance policies for themselves, their homes, and their companies. Many brokers specialize in a particular type of insurance, such as commercial policies for businesses, while others can offer advice on a broad range of insurance policies and types.
Unlike an insurance agent, an insurance broker does not work for an insurance company, but directly for his or her clients. This allows a broker to provide a broad range of policy options from many different companies to help clients find the policies that fit their needs. In most cases, insurance brokers do not charge their clients for their services. Instead, they receive a commission from the insurance company based on the policy sold. Because brokers are required to represent their clients’ best interests, they prioritize finding the best insurance for their clients.
Brokers Provide Expert Advice
Insurance brokers have a high level of expertise in the field of insurance, which they have gained through both education and experience. These professionals are highly regulated by the states in which they operate, and they are typically required to have a license to provide services to clients. To become licensed, an insurance broker must take courses and pass an examination. He or she must then take continuing education courses to maintain the license. Through these requirements and practical experience, brokers gain a high level of knowledge about all aspects of insurance, from policy limits and exclusions, to events that trigger coverage.
Using this expertise, insurance brokers make their business and individual clients’ lives easier by providing advice designed to help them purchase the best possible insurance coverage. A broker will evaluate the needs of a particular person, family, or individual and assess the type and level of risks that should be covered through insurance. With this information, a broker can help his or her clients make informed choices about the policies and coverage level that they need and give them several options from different insurance companies.
Most business owners and individuals who purchase insurance do not have much (if any) knowledge of insurance. They are likely unfamiliar with how policy exclusions work or about different levels and types of coverage. For example, a business seeking to purchase professional liability insurance may not understand that total coverage may be subject to “shrinking limits,” which means that legal fees are deducted from the total policy limits, rather than paid in addition to settlements or awards. This could lead to significant financial exposure for the business if the policy limit is too low. Attempting to learn about insurance to pick a policy package can be incredibly burdensome given the complexity of many insurance plans. In addition, many consumers choose a policy based on the premium price or policy limits, without a real understanding of what insurance they need or what the policies cover. An insurance broker can eliminate this uncertainty for his or her clients, providing expert advice to help clients choose optimum coverage for their needs and budget. Clients can take advantage of this knowledge, simplifying the process of selecting insurance.
Brokers Offer a Range of Options
Unlike agents, insurance brokers do not have a limited relationship with just one insurance company. Instead, they have access to a variety of policies offered by many different insurance companies. They may also have the ability to offer policies that are not available to most consumers. These factors can help clients get the best insurance for their budget and their needs.
By working with a broker, clients find that their lives are easier because they are not limited in selection to one particular company. They can pick and choose from a list of options, including levels of coverage, types of policies, and different insurers. This helps them get the coverage that works for them — not a one-size-fits-all policy that may not address their specific needs. Because brokers are experts in the field of insurance, they can then help clients choose from among the various policies by analyzing what each policy covers and excludes, in addition to examining premium rates and policy limits.
Brokers Offer Ongoing Service
Once insurance has been purchased, the transaction may be over, but the need for advice and assistance is not. Most insurance brokers provide service to their clients throughout the policy term. This may include:
- Helping clients in filing claims
- Offering advice on whether clients should change their policies or coverage
- Making sure that their clients comply with their policy’s requirements
- Informing clients of changes to the law or insurance landscape that may impact coverage
This type of service is incredibly beneficial to clients, particularly those who may be unaware of the technical terms of their policies and may not be able to take full advantage of their policies as a result.
For example, if a homeowner notices a small leak, he may ignore it because it seems relatively minor. This small leak may then lead to a ceiling collapsing, which causes a significant amount of damage. When the homeowner attempts to file a claim, the insurance company may deny coverage because the triggering event — the leak — was not reported in a timely fashion. A broker can help policyholders avoid denials of coverage by offering advice throughout the policy period. When he first saw the leak, the homeowner could have called his broker to ask whether it was covered under his insurance policy and whether he should file a claim now or wait for additional damage. A broker’s evaluation of the situation could have resulted in coverage for the claim.
Brokers Save Their Clients Time and Money
As discussed above, insurance brokers have expertise in the field of insurance and access to a range of insurance options. By putting this knowledge to work in the best interests of clients, brokers make lives easier by often saving clients both time and money.
Instead of spending hours or even days attempting to figure out the best insurance coverage for your business or family, an insurance broker can take on this task for you. A broker can analyze your risks and liabilities to determine exactly what type and level of coverage you need for your business, home, or family. Using technology-based tools, a broker can help clients compare different options to help determine which policies would best fit a client’s needs. A broker eliminates the need for individuals and businesses to spend significant amounts of time learning about insurance and reading lengthy policies to determine which policy is right for them.
Insurance brokers also help their clients save money by making sure that they only have the coverage that they need. Being over insured or underinsured can be incredibly costly. By advising you on what coverage you need, brokers can make sure that you are not paying for coverage that you do not need or using insurance that will not protect you in the event of a loss.
Brokers also save their clients money by getting them better rates on insurance policies than they would be able to purchase on their own. Insurers know that consumers who utilize the services of insurance brokers are more likely to have the right level of coverage and less likely to make unnecessary claims. Because these factors ultimately save the insurance companies money, they tend to offer special broker pricing. This gives clients a range of lower-cost options from different insurers, allowing them to comparison shop to find the best deal on coverage that works for them.
Brokers Give Their Clients Peace of Mind
People buy insurance to protect their property, business, home, or family. An insurance broker gives clients peace of mind because customers know that they have enough of the right type of insurance to fully protect them against potential risks. By building a customized, comprehensive insurance package for each client, insurance brokers allow their clients to rest easy knowing that they are fully covered.
When a client works with an insurance broker, the broker will perform a full analysis of the client’s needs and then compare those needs to the available insurance products. A broker may be able to point clients to insurance that they did not know was even available, such as travel insurance for businesses whose employees travel internationally, or a special policy rider on a homeowner’s policy for high-value jewelry. With specialized knowledge and expertise, an insurance broker can make sure that each client’s liability concerns is adequately addressed. This makes clients’ lives easier because they know that they have full coverage — allowing them to focus on what is important.
Working with an Insurance Broker
If you are in the market for insurance for your business, home, vehicle, or your family, an insurance broker can make your life easier in a number of ways, including providing expert advice, saving you time and money, and offering a wide range of options. By helping you put together a comprehensive insurance package to meet your specific needs, an insurance broker will give you peace of mind in knowing that you are fully covered in the event of a loss. Contact The Business Benefits Group today to learn more about how he or she can help you buy the best possible insurance for your needs.