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What do insurance brokers do?
They help you to decide what risks you should insure against, then arrange the insurance for you. They will help you when required, especially if you have a claim, and remind you when policies are due for renewal or amendment.
Is an insurance broker the same as an agent?
No! There is a very big difference. The agent acts on behalf of one or more insurance companies and can only sell what they have to offer. On the other hand, the broker acts on behalf of you, the client. The broker is legally obliged to act in your best interests, is not tied to any insurer and is therefore free to arrange the best deal for you.
How are insurance brokers paid?
A commission is usually paid by the insurance company with which the Broker places your insurance.
Do I have to pay any other charges?
Insurance Brokers may charge an administration fee in addition to commission when you enter into an insurance policy; and / or a flat fee for arranging an insurance policy, or a fee based upon the time we spend advising you; and / or You will be advised of the nature and amount of any fee involved prior to us performing the service for you.
Why should I use an insurance broker?
An insurance broker’s job is to help you to deal with the complex questions which insurance raises. Insurance brokers provide convenience, choice and expertise. Convenience, because one insurance broker can normally handle all the insurance policies you need. Choice, because an insurance broker deals with a range of insurers and will suggest the contract which best fits your particular circumstances.
Expertise, because insurance brokers spend their working lives learning about insurance; they know far more about it than you have time to learn.
I'm concerned I'm only being sold policies with high commission.
It’s not in the insurance broker’s interest to do that. He wants to keep you as a client for many years, and he won’t if you find out he’s sold you an unsuitable policy for the sake of a higher commission. If you’re really worried about this, you can ask the broker to explain several different policies to you.
Surely, though, it’s cheaper to go direct to an insurance company?
Insurers have to pay for administration, either through commission to an insurance broker or by employing staff themselves, while some direct writers incur heavy costs on expensive advertising. So you won’t necessarily find it any cheaper to go direct to an insurer. More importantly, you are likely to get better value by dealing through a broker, since he should be able to ensure that you get the cover that is right for you at a competitive price, because of the volume of business he handles.
I judge my insurance policies by cost. Is that right?
No, because you are probably not comparing like with like. Cover can vary — no two Motor policies ever mean quite the same thing by "fully comprehensive", for example. Insurers can vary as well, in how strict they are in interpreting the terms of the policy, and how quickly they settle claims. All these things are changing from day to day. It’s your insurance broker’s job to know which insurer is likely to meet your needs best — as well as to consider the cost. The three factors to consider in selecting an insurance policy are security, cover and cost — in that order.
Is there any other screening process?
Yes. Once they are licenced, insurance brokers can apply to join the National Insurance Brokers Association (NIBA), the professional organisation that represents brokers on a national basis. Membership is voluntary and subject to stringent criteria, based on training, experience and peer group review, plus compliance with a formal Code of Conduct.
So if I go to an insurance broker I’ll get the best possible service?
Yes! We at John Smith Insurance Brokers would be happy to assist you with any of your insurance needs.
We will listen to what you need and ensure you get exactly the insurance policy that best suits your needs. We pride ourselves on delivering the best service possible.
Please contact us for more information
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