I don’t know about you, but I have a few friends that are not only great to hang around with but also are very useful. Knowing a doctor, a lawyer, an accountant can always help out. One missing key among my entourage is the fact that I am not friends with an insurance broker. In a world where insurance policies are becoming increasingly complex and where it’s more difficult than ever to truly determine what type of insurance we need, what premiums we should reasonably expect to pay and where to get the best coverage.
It’s Not All About The Premium But
Some critics of using brokers would say that it’s a bad idea to make decisions based only on costs. The exact coverage, the service, etc all should be factors. I couldn’t agree more. That being said, I still want to know the rates that are available in order to make the best decision and if I do end up paying more than the minimum, at least I would know how much more.
Ask About The Insurance Broker’s Compensation
When dealing with any type of broker (financial, insurance, etc), it’s always a good idea to know how they’re being paid. In general they will either charge a flat fee or (more commonly) receive a commission on policy sales that they are able to get done. You can here why having a personal relationship with your broker would help a great deal. You want the broker to work hard on getting YOU the best deal rather than push the best paying one.
How To Evaluate Your Broker
It’s very important to “check” the market for yourself initially. Yes, I know, having a broker is supposed to save you time but how could you possibly judge the performance of your broker if you don’t do the research first. Pick one policy, look around at a few different companies and then see what your broker is able to come up with. Without a doubt, it should be as good as what you were able to find at worst. If not, ask yourself some questions. Why? Among other things, brokers often get better quotes than you or could get. Why? Because if a big insurance company is giving a quote to a broker, they know that the only way they can get the sale is to quote on very tight margins.
Your broker should have a lot of added value in terms of explaining the differences between policies and guiding you towards picking the product that you really need. He should be the objective partner that is actually on your side rather than trying to extract every single dollar that he can.
So back to you, have you ever had experience with an insurance broker? If so, please tell us about it!