Insurance Broker Vs Insuring Directly:
Below are listed some benefits of using an insurance broker such as Lloyds over insuring directly with an insurance company, bank or building society:
An insurance broker is not biased towards any particular provider so can pick the best option for their client whereas the client takes full responsibility for coverage decisions and any mistakes made if they insure directly.
It is easier for a client to build an ongoing relationship and loyalty with a broker as they spend time getting to know clients and how to serve them best over a long period. Larger insurance companies cannot offer the same level of personal attention. With larger insurance companies, clients may talk to a different call centre operator each time they need advice/help.
Brokers manage the process and stress of making a claim on the clients behalf whereas with an insurance company, the client must manage the process themselves, often in a crisis situation. Clients are often left confused and upset at claim conflicts that may arise.
Perhaps the biggest benefit of using an insurance broker is the fact that they search for the best prices, value and benefits for clients. Brokers take the hassle out of searching around for the best policies, saving the client the time and money doing it themselves.
Brokers have full and easier access to the entire insurance market when choosing the best option for a client. An insurance company can only offer their own product.
A broker will offer detailed reasons why they recommend one product over another and are at hand to offer professional advice at every step. An insurance institution can only offer advice on their own product.
The insurance industry is famously jargon filled and often direct insurance provider policies are difficult if not impossible to understand. Larger insurance companies may not take the time to explain the intricacies of a policy to a client. Insurance brokers have made a point of speaking in laymen’s terms when dealing with clients and letting them know in plain English what the best options and actions are.
Market Service Standards
Brokers will be used to dealing with multiple different insurance companies and will be used to the service standards of each so can better ensure the best company to go with in terms of service, price and benefits to the client. Once a client chooses their own insurance company, you are at the mercy of that provider and their level of service.
Broker Commission Explained:
A broker’s commission or remuneration is a fee paid to brokers for the placement of business with a particular insurance institution. In return for this fee the broker provides the following:
- Proposing the risk
- Assisting the insurer with any information required in relation to risk
- Incepting the policy and handling all policy documentation for the consumer on behalf of the insurer
- Notifying the consumer of policy renewal dates
- Collecting the fee/premium from the consumer on behalf of the insurer
- Handling premiums and managing a dedicated premium account for onwards transmission to insurers
- Ensuring broker staff are qualified to give advice on the insurer’s behalf
- Bear compliance and administration costs in relation to transacting business on an insurer’s behalf
- Assimilate costs of implementing IT and security requirements of insurers to ensure online products are safely transacted for the consumer.
Why Brokers Fees?
The consumer/client pays the broker a fee for the following benefits:
- Researching the current insurance marketplace to provide the best advice on available policies and covers
- Recommending the best product based on the consumer’s needs and budget
- Explaining terms, conditions and warranties of a chosen policy to the consumer in plain English
- Handling alterations to existing policies and following through with insurers to make sure changes are fully implemented
- Assisting the consumer with claim handling and ensuring a satisfactory outcome for them
- Providing consumers with replacement or duplicate documentation when required
- Assisting with any complaints a consumer may have with a policy or service
- Complying with the cost of significant regulatory directives from the Central Bank.
For more information see Brokersireland.ie/why-use-a-broker/