If you have ever spent time researching and comparing insurance policies, then you know it can be challenging and frustrating. The jargon is enough to send many people running. Also, you have to remember to consider specific details and other factors that can change quotes and terms. There is a much easier way to get the insurance cover you need at a price you can afford; work with an insurance broker.
What is an Insurance Broker?
An insurance broker helping a client[/caption]An insurance broker is an expert advisor who has the know-how needed to help clients assess their needs and risks. Using this information, insurance brokers can tailor insurance policies to meet a client’s unique circumstances. This helps a broker determine the amount of insurance cover that individuals need.Because of their ability to assess risks and their knowledge of trends, insurance brokers can assist clients who need to stretch their insurance dollars.An insurance broker must hold a license from Australian Financial Services or be designated as an authorised representative of an AFS license. Brokers understand the terms, fees, prices, and exclusions of a wide range of insurers. They represent their clients at the point of insurance purchase as well as in the event of an insurance claim.Unless otherwise stated, an insurance broker works on behalf of those purchasing insurance.
Why Should I Use a Broker?
Insurance brokers are able to make your cover purchase faster, easier, and often less expensive than if you go it alone. Here are the top five reasons you should work with an insurance broker.
- Knowledge - A broker will have insight and experience to help you navigate the process of buying insurance cover. Insurance policies are famously difficult to understand for anyone not employed in the insurance business. An insurance broker serves as your guide assessing risks, evaluating cover, and determining the right policy for your needs. This includes creating a portfolio of various policies for your home, business, auto, and other insurance needs.
- Multiple Options - If you attempt to purchase an insurance policy on your own, you will have to look at individual company’s offerings and try to adjust your needs into one-size-fits-all policies. Your broker accesses many companies and easily compares policies and prices. Additionally, insurance brokers can work with numerous insurance underwriters. This is especially helpful if you own rare or unique items. To properly insure something that is out of the ordinary, the right underwriter is crucial.
- Up to Date Evaluations - Frequently, consumers view buying an insurance policy as a one and done proposition. This is rarely the case. Whether your cover is personal or for a business, the value of what you are insuring is subject to fluctuations in value. For example, grandad’s large plot of land in WA will increase in value dramatically if he finds gold there. However, without adjusting insurance cover to keep pace with the value, the amount paid out on a claim may be insufficient. An insurance broker will stay on top of details such as this because they know the importance of getting the value correct.
- Help With Renewing - Customers often view renewal of policies as an automatic process. They do not consider that many factors can change between renewal terms. Adding expensive equipment to your business or a granny flat to your back yard will demand an alteration to your insurance cover.
- Assistance Filing Claims - If you are in the unfortunate position of needing to file an insurance claim, you can expect some frustrations. However, an insurance broker knows how to work with your insurance company to get you the best possible outcome. Having a broker in your corner can give you a great deal of peace of mind.
Don’t They Only Work for Big Companies and Wealthy People?
The idea that you must be a large business or a wealthy individual to need an insurance broker is a common misconception. While an insurance broker would benefit these people, a broker can be especially helpful to small or medium-sized businesses and people of average income levels.Working with an insurance broker is a great way to save money no matter what your income level or business size. Their connections and experience lead you to the best cover at the best price.
How Do I Choose an Insurance Broker?
Choosing an insurance broker is similar to choosing other professionals to work for you. However, there are a few specific things to look for in your insurance broker.
- Valid Australian Financial Services license
- Adherence to the standards outlined in the Corporations Act 2001
- Shows they are acting in your best interest
- Explains things in detail to be sure you understand your policy
- Inform you if the advice they provide comes from incomplete information
- Give you a Statement of Advice (SOA) to document the advice they provide for you as it relates to your insurance policy
Working with an insurance broker can turn the arduous process of purchasing insurance cover into a simple and even pleasant experience that saves you time and money.