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What can an Insurance Broker Do for You and Who is the Right Broker

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insurance broker specialised in many different types of insuranceIf you are wondering what an insurance broker is, an insurance broker is an expert in insurance as well as risk management. Brokers work for their clients and advise them in their interest, whereas an insurance agent will work for the insurer. A broker will help you recognize your individual and/or business risks so as to help you decide what to insure and find other ways to manage those risks.

An insurance broker might be an expert in one particular type of insurance or many different ones. He can give you very useful tips when you need to make a claim.

Brokers are familiar with the terms and conditions, rules and regulations, advantages and exclusions and prices of a broad range of competing insurance policies. So, with their help you can find the most beneficial cover suitable to your particular situation.

Why to Use an Insurance Broker?

Insurance brokers have an access to several different insurance policies and since they are connected to a variety of insurance companies directly, even sometimes they can access policies that are not usually available to most consumers.

Since the general insurance industry in Australia provide so many alternatives, it may be at times quite tough to choose the correct policy.

Some of these policies may be so complicated that you need an insurance broker to help you understand the clauses in a policy and check whether such a policy can offer you the level of cover you require, so that you can rest assured that you are adequately protected.

Depending upon the kind of advice an insurance broker may offer, he may be needed to offer that advice along with other information in a document known as a Statement of Advice (SoA).

Brokers can usually find you the best deal on insurance since they have a great understanding of the market and can even negotiate premiums on your behalf.

insurance broker finds you the best deal on insurance

You can take help of a broker to get your policy explained to you and an advice about if it includes any special clauses you must be aware of.

Brokers can even prepare an insurance and risk management program customised to you or your business, in which they design the policies, discuss the terms with insurance providers and place the cover with the insurance provider.

Due to the inclusion of a risk management program, which places some of the responsibility for loss minimisation and risk prevention on you or your business, you can also lower premium costs.

Your broker will also help you when you need to make a claim on your policy. He will help you go through the process and mediate with the insurance provider on your behalf.

You might have to pay a fee to your broker for his service or he might be paid a commission from the insurance company. He needs to advise you of the fees charged by him or the commission he gets. These fees and costs that come with their service should be set out in your SoA.

insurance broker risk management

How to Choose a Broker?

Every insurance brokerage in Australia should have an Australian Financial Services (AFS) licence or should be appointed as an authorised representative of an AFS licensee.

Brokers should also fulfill the standards of conduct set out in the Corporations Act 2001.

When a broker offers you a personal financial advice, according to the Corporations Act, they should:

  • Work in your best interest
  • Give you a correct advice
  • Caution you if their advice is not based on complete or accurate information
  • Give priority to your interest when a conflict arises with their own interests
  • Provide you with a Statement of Advice (SoA) that contains their advice related to the insurance policy and prepare you with the same

Remember all this information and find an insurance broker that will offer you the best advice and see to it that you are in maximum profit. And that will be the right broker for you!

insurance broker works in your best interest

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