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Choosing the Right Insurance Broker

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choosing the right insurance brokerWhile going through a major life-changing event like joining a new job, getting married or buying a new property or a car, you need to review your insurance status and in that case, along with picking the right amount of insurance coverage, you also need to choose the right insurance broker. While all insurance brokers seem same to you, how will you choose the most perfect one for you? Here are some tips.

Insurance Broker, Independent Agent, Captive Agent – Is There Any Difference?

Yes, there is a difference. Insurance agents are of two types – independent and captive. An independent agent may be working with many different insurance companies, while a captive (or direct) agent works exclusively for a particular company. Both of them receive commission from their respective companies.

On the other hand, an insurance broker represents you or your company in the local insurance market and searches for maximum coverage at the best possible price. As a broker represents you, s/he usually charges you a fee.

To Start With…

Before starting to find the right insurance broker/agent, better you brush up your insurance knowledge, because that will help you make a more educated decisions with the help of your broker. Study and understand the different terms and coverage in various policies that will fulfill the needs of you and your family, and keep your knowledge up-to-date.

Choosing an Broker/Agent

Once you brush up your insurance knowledge, you can start finding a broker/agent for you. But how will you do that?

Referrals from Acquaintances – Asking family, friends, colleagues and other acquaintances about a good insurance agent/broker is always a right first step. But also ask why they like the services. Is it due to the honesty? Is it due to after-sale service? Are the coverage and the company good?  Is s/he offering discounts? Or is it just the good looks and friendly talks of the broker/agent? You should choose the broker/agent who is known for her/his honesty and an excellent after-sale service.

Through Internet – Many insurance companies publish lists of their licensed agents online, which you can go through. For example, for people in Australia, I recommend checking out an extremely useful website – All Insurance Brokers. For those in Canada I recommend Manta and for those in the UK, UK Directory is a very good portal to check out.

Trade Associations and Other Business Owners – If you are a business owner, you can inquire with your local business associations and other business owners about a good insurance broker/agent.

Purchasing Insurance Directly From the Company

Skipping a broker/agent and directly buying insurance from an insurance company is beneficial many times, because it saves money. But in that case, you should study the documents of the policy well and should know all the pros and cons thereof. You should also do research about the company’s credibility and whether it is licensed to do business in your state.

Criteria for Choosing a Broker/Agent

While choosing the perfect broker/agent for you, you can apply certain criteria.

Comfort Level – Interact with your prospective broker/agent and see how comfortable you feel with her/him. Study her/his working style. Initially you can ask for quotes, which doesn’t mean that you have committed to work with her/him. It is just a way to see her/his way of working and the level of confidence s/he can develop in you.

Credentials – You may see some letters before the names of the brokers/agents on their business cards which denote their credentials they have received from different insurance companies. Ask them its meaning and what had they done to earn those credentials.

License – It is important to check that the broker/agent and the company s/he is working for are licensed in your state. You can do this by calling the state insurance department or online.

Complaints – While checking for the licensing of the broker/agent and the company, you should also check if there are any complaints filed against them.

References – Just like while applying for a job, you need to provide references, you too have the right to ask for references from the broker/agent; so don’t hesitate for that.

Asking Questions – It is possible that you might have heard about a particularly interesting insurance situation and might be wondering about what your broker/agent would deal with it. Don’t be afraid of asking such questions to the broker/agent.

Taking Help of State Insurance Department – If you still have doubt about how to evaluate your broker/agent, take help of the state insurance department.

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