Why Using a Broker is the Best Option
Your insurance needs can be complex and attempting to understand it all can be challenging and time-consuming. Your time is valuable and helping you reduce stress surrounding insurance policies is what brokers are here for.
A professional insurance broker has the experience and knowledge to decide what sort of cover will best suit your needs and will take the time necessary to discuss each of your options with you.
Accurately satisfying your insurance needs in all environments is important and your insurance broker will help you research and come to terms with what exactly your personal or corporate insurance needs are, while finding you the best available offers.
With this in mind, here are some more reasons why using a broker is the best option:
1. Impartiality
An insurance broker is not biased towards any particular insurance provider and will therefore be able to pick the best available option for their client every time. An insurance company on the other hand will always be biased towards their own product and services range, which may not be the best option for the consumer who will be taking on the full responsibility for the coverage decision.
2. Relationship
Customer loyalty and building long-term relationships are of utmost importance to the insurance broker. Brokers will take the time needed to learn more about their clients which in the process is ensuring the service provided is satisfactory to the client’s needs. Insurance companies find it difficult to build this relationship which creates a distance between themselves and the client.
3. Claims Service
In what is one of the more important reasons that people take out insurance policies, your insurance broker will guide you through the claims process and manage the claim on the client’s behalf. This process is the full responsibility of the client when dealing with a direct operation, which can confuse and upset the consumer.
4. Best Price
The insurance broker will always provide their client with the best value deal for them at the best price. The broker will take into account more than just the financial cost of the transaction but also the hidden benefits that can be found, which the insurance provider will not be able to match.
5. Choice
An insurance broker has full access to the insurance marketplace and will be able to provide a wide range of options for their clients which cannot be matched by a direct provider.
6. Professional Advice
An insurance broker will offer a consumer a Statement of Suitability document outlining all the options available to them and the reason why they are recommending one particular policy over another. A direct provider will only be able to provide this document on their own policies and therefore cannot offer a wide range of advice.
7. Simplicity
An insurance broker will communicate in terms that the client will understand so that they are fully aware of what their options are. Insurance brokers are aiming to eliminate the risk of the client ending up with the potential wrong policy and many brokers have built a career dealing in this way. A direct provider sometimes lacks the communication skills necessary to confidently inform the client of their product or service offering and what it entails.
8. Market Service Standards
An insurance broker has access to a wide variety of insurance products and is aware of the service levels that each of the products provides. As such, they can compare various products and services from different providers and decide on which potential deal will be the most suitable for their client.
Why a Broker Gets Paid Commission
The commission is the remuneration paid to brokers for the transaction and placement of business with the Insurance Company (i.e. the acquisition cost for Insurers). The activities undertaken by a broker to receive this remuneration would include:
- Proposing the risk to the insurance company
- Assisting the insurer with any information required by them in relation to the risk
- Incepting the policy and delivering all policy documentation on behalf of the insurer to the consumer
- Ensuring the consumer is notified and advised on the renewal of the policy on behalf of the insurance company
- Collecting the premium on behalf of the insurance company
- Handling the premium in a designated client premium account for onward transmission to the insurance company
- Ensuring the staff are qualified in accordance with legislation to advise on the insurance company’s products
- Bearing all compliance and administration costs associated with transacting the business on the insurance company’s behalf
- Assimilating the costs of I.T. and security requirements from insurers to ensure that all online products are safely transacted on the consumer’s behalf
Why Would a Broker Charge a Fee
A fee is a remuneration paid to the broker by the consumer for services, unrelated to the transaction of placing the business with the insurance provider, in relation to:
- Researching the insurance marketplace on behalf of the consumer and providing the best advice on all possible products and services
- Recommending the best product or service available to meet consumer needs based on their vast industry knowledge and expertise
- Explaining the terms/conditions/warranties etc. included in the policy.
- Handling mid-term alterations to existing policies and following through with insurance companies to ensure the MTA’s are implemented
- In the event of a claim, assisting the consumer with the claim and bringing it to a satisfactory outcome assuming the risk is covered under the policy and all conditions have been satisfied by the policyholder.
- Furnishing consumers with duplicate documentation where required or requested.
- Assisting with any complaints the consumer may have in relation to the service or product.
- Complying with the cost of significant regulatory directives from the Central Bank.
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