You cannot always be the expert at everything, especially when it comes to securing an insurance contract from a company. Several insurance companies are currently reigning the markets with their lucrative packages featuring fine prints that nobody bothers to read. However, it is mostly where people set themselves up for losing money. They entrap themselves in a deal that would only milk them for money rather than providing adequate coverage.
As a result, hiring an insurance broker can help you save the hassle you experience while hunting for a reliable company. Apart from this, the insurance broker will also assist you in securing a deal at an unbelievable price. They can also help you set you up with companies that do not sell their insurance products directly to customers.
Therefore, if you are sold on the idea of hiring an insurance broker, here are the steps you can follow to find one. However, before we delve into the process of finding an insurance broker, here’s a quick paragraph explaining the difference between an insurance broker and an agent.
Understanding the Difference Between Various Intermediaries
It is essential that you understand the difference between various financial intermediaries operating in the market. The two most commonly used terms are “agent” and “broker” and are often used interchangeably by several people who do not understand the difference between the two.
An insurance agent is typically a company’s representative and will act on their behalf and not yours. An agent is required to sign a contract with the insurance company they are representing, called an agency agreement. According to the terms stipulated in that document, the agent is bound by the organization they are representing and will get a commission for every time they sell a policy.
On the contrary, an insurance broker will act as a representative of you, the buyer. No insurance broker has entered into a contract with an insurance company that will bind them to its policies. Like agents, insurance brokers are paid a commission too. However, this time it will be you and the company who would be paying a commission to the broker for acting as an intermediary. If a broker wants to issue coverage on the customer’s behalf, they will ask the insurer to issue an insurance binder and help the client navigate through the necessary paperwork.
Finding the Right Insurance Broker
The first step in finding the right broker is to obtain recommendations from your colleagues, friends, and family. That way, you will not have to vet the candidate if they have already had dealings with the people you know in the past. You can also look for referrals on company websites or trade organizations to find a reliable insurance broker. Are you looking for an insurance broker who can offer the best deal? Visit laib.com.au.
Since the market is highly competitive, do not settle on the first broker you meet. Always shop around, understand, and compare the features offered by one broker with others, and then make your decision. Obtaining recommendations is the quickest way to find a reliable insurance broker since you will have the satisfaction that they served someone you know in the past and will come through for you too.
Interview your Candidates
There could be a vetting stage between these pointers if you found someone through third-party website links. However, once you have vetted your candidates or obtained them through recommendation, it is time that you grill them with your inquisitiveness and ask away everything there is in your head. Several people hold themselves when talking to an insurance broker so as to not put them off with excessive questioning. However, it is also precisely where these people go wrong.
Choosing an insurance broker is a relationship of a lifetime. And it won’t work with someone who cannot even answer your questions in the first meeting or find it annoying to respond to every little thing that goes on in your head. If you do not know what to ask, consider reviewing the following questions to grill your potential insurance broker in person or via phone.
- How long have you been working in the industry, and what makes you stand out from the rest?
- What kind of insurance do you sell? Are you associated with any firm?
- Have you received any credentials like the Chartered Property and Casualty Underwriter (CPCU) or Certified Insurance Counselor?
- Will you be representing any specific insurers if we take this arrangement forward?
- How do you communicate? Will you be available on a call during business hours? Do you correspond through email?
- Are you familiar with the industry I am seeking insurance for?
- How long have you been certified as an insurance broker?
Yes, shop for your insurance broker like you would shop for your boots and want only the best deal for yourself. There is no harm in comparing the policies offered by different brokers to choose which one is the best. Apart from this, you can also make a choice based on the kind of coverage those policies will provide, the insurance company you will be securing the contract with, and any redressal services the broker offers once you have signed the contract.
Comparing the brokers with set industry standards won’t land you anywhere. Insurance is a very competitive market. You will always find someone offering you the same policy at a lower price. Therefore, if you want the best deal for yourself, compare your insurance broker with others and see how they are providing you the edge in the market.
Now that you know the steps involved in finding an insurance broker, follow them to the letter and find yourself a reliable agent. There is no harm in wanting to take your time and being thorough with your choice. Getting insurance is a bigger deal than many make it seem to be. Therefore, do not rush yourself or your decision and vet every candidate’s profile you receive.