There are many ways in which to buy your insurance cover. Direct from an insurer or through a comparison site. But have you considered working with an insurance broker?
Here we look at what insurance brokers do and why you may want to work with one to meet your insurance needs
What does an insurance broker do?
Insurance brokers are professional companies, regulated by the Financial Conduct Authority (FCA). An insurance broker will work with a panel of insurers from across the insurance market to find you the right cover and best price for your insurance needs.
Insurance brokers can work on your behalf if you are looking for personal insurance – car, home, travel insurance etc. Or commercial insurance – business insurance, fleet insurance and more.
According to the Money Advice Service website, when it comes to the insurance market, brokers are ‘experts in the market and – even with run-of-the-mill insurance – they can often find you better cover at a great price.’
Insurance brokers can:
- Provide advice on the risks that you may face – whether you are buying personal or commercial insurance
- Find the right insurance to meet these needs and cover these risks, at the best price from insurers across the market
- Support you through the claims process – i.e. speaking to loss adjusters and claim handlers
When should you use an insurance broker?
Anyone can use an insurance broker to arrange their insurance.
Those working for an insurance broker will be experts and specialists in insurance. They are therefore well positioned to be able to advise you of the cover you may require.
In particular you may want to use an insurance broker if you:
Have complex insurance needs – e.g. you are a business owner who has multiple businesses and properties
Are looking for specialist cover – you may have health conditions which make it harder to obtain travel insurance or require specialist insurance for a property in a flood risk area
Need a specialist provider – comparison sites typically offer a more generic selection of insurance providers – those that cover mainstream risks. If you have a classic car for example, it is unlikely you will find a specialist provider on a comparison site. The same will likely be the case if you have high value collections e.g. art, jewellery. Brokers are more likely to be able to access specialist providers or access the right cover from mainstream providers.
Watch these videos from the British Insurance Brokers’ Association (BIBA) for more information on how a broker could help if you are looking to buy personal insurance or commercial insurance.
How are insurance brokers different to insurance agents?
An insurance agent will typically only work for one insurance company. In comparison, an insurance broker works on the behalf of the customer and will have access to a wide range of insurers across the market, so choice and cover is not limited.
So, if you work with an insurance agent you will only have access to the particular insurance company that they work for. Whilst an insurance agent will get you the best cover from the insurer they work with, you will be limited with regards to the rest of the insurance market. An agent therefore effectively works on behalf of an insurer.
Whereas an insurance broker works on behalf of the client. BIBA code of conduct states that brokers must ‘Act in the best interest of each client’. This gives you access to a wider range of insurers.
Does using an insurance broker cost you money?
No, working with an insurance broker should not cost you money. They will provide insurance quotations and advice free of charge. Brokers are paid a commission by an insurer when they sell one of their products. In the same way that a comparison site is.
Before working with an insurance broker do check that they are regulated by the Financial Conduct Authorityto give you peace of mind that you are working with a genuine company.
The important thing to remember is that insurance can be a very complex purchase. Getting the wrong insurance, not enough insurance or not protecting against the right risks can be devastating if you do have to make a claim. If you buy your insurance directly from an insurer or via a comparison site, then the risk of getting something wrong sits entirely with you. Going to an insurance broker gives you an expert view and expert advice from people who specialise in insurance.
If you are considering working with an insurance broker, read more about why Anthony Jones are a trusted, independent, local insurance broker here. You can also contact us if you want to discuss any of your insurance needs.