What An Insurance Broker Does
What An Insurance Broker Does
An insurance broker is a professional that deals in risk management and different types of insurance. If you’re shopping around for insurance for either yourself or your company, an insurance broker is the person you need to approach.
Since insurance is a broad industry, it is not uncommon to come across an insurance broker who specializes in one type of insurance. But not all insurance brokers focus on one type of insurance, many of them are a jack-of-all-trades within the industry. If you’re in the market for an insurance cover, an insurance broker will help you shop around for an insurance policy. In most cases, insurance brokers won’t charge you a dime for the services they offer.
Specifics of an Insurance Broker’s Job
Brokers are normally regulated by the State in which they work. In order for a person to practice as an insurance broker they are required to hold a broker license that can only be acquired after taking some courses and sitting for an examination.
Insurance broker regulations vary from one State to another. Some States require that practicing insurance brokers undergo continuous education in their field in order to maintain their insurance broker license.
These stringent education measures ensure that insurance brokers are able to gain a significant level of knowledge. By having a proper grasp of insurance, insurance brokers are able to provide customers with granular information regarding the different types of insurance.
A qualified insurance broker is the best placed person to say for instance, explain what a home insurance policy covers and what it does not protect the insured from.
A broker’s main responsibility is to ensure that their clients have a proper understanding of the liabilities they might have and how an insurance can help mitigate those risks. Insurance brokers then help clients choose what insurance policies might be best for them.
How Are Insurance Brokers and Insurance Agents Different
Most people have either worked with or are familiar with insurance agents. However, you need to understand that there’s a difference between an insurance broker and an insurance agent. Whereas insurance agents work for the insurance company, insurance brokers work for the clients whom they represent. Their primary goal is to ensure that their customers get the best deal.
Since they don’t work for a particular insurance company, insurance brokers, have access to numerous insurance policies from various insurance companies unlike insurance agents who only sell insurance policies sold by the insurance company the work for.
An insurance broker is responsible for helping their clients identify various liability risks they are susceptible to as a business, family, individual, or organization. Depending on the client’s needs, the insurance broker will provide them with various quotes to choose from. In addition, the insurance broker is responsible for breaking down the terms and conditions of an insurance cover to the agent.
Some insurance brokers even go as far as help negotiate reduced rates for their clients depending on the client’s insurance history as well as the amount of insurance cover they are looking to buy.