Searching for insurance can feel like a chore, but an insurance broker can simplify the process and help you find a policy that provides both value for money and cover tailored to your needs. We explore what an insurance broker does and how you can benefit from their expertise.
- What is an insurance broker?
- What’s the difference between an independent insurance broker and an agent?
- What is a wholesale insurance broker?
- Are there any regulations or governing bodies for insurance brokers?
- Why should you use an independent insurance broker?
- Do insurance brokers handle claims?
- How much do insurance brokers cost?
- Is an insurance broker right for me?
An insurance broker typically searches the marketplace for a policy that meets your needs and will advise you on what cover they consider most suitable. Often, they work from a wide panel of insurers, but may have also developed policies with single insurers. Brokers work in both personal insurance and business insurance so no matter what you need, you’ll be able to find expert guidance. Principally they are there to save you time and provide added reassurance you’re arranging the right cover.
Some insurance brokers provide a ‘non-advised’ service, others are ‘advised’, some may offer both depending on how you access them (e.g. advice on the phone, but non-advised online). In both cases, you should be given enough information to make an informed decision.
An independent broker essentially works on your behalf. Their aim is to find you the best value insurance policy for your specific needs. They’ll often have access to a wide range of insurance providers and will be able to take you through a number of options.
An agent will have a smaller pool of insurers or more likely a single insurer to recommend. While they are also there to provide you with a range of insurance options, they can only offer you policies from select providers. In other words, their interest is to sell you one of their policies.
A wholesale insurance broker will typically have developed specialist schemes with insurers which they are able to ‘wholesale’ to other insurance brokers. Wholesale brokers do not deal with policyholders directly, instead the client will deal with their own broker. As an example, we have a wholesale farm insurance scheme that we have developed which is used by hundreds of independent brokers across the UK.
The insurance industry is regulated and any firm who advises, arranges, or sells insurance must be authorised by the Financial Conduct Authority (FCA).
You can check your broker is authorised by checking the FCA’s Financial Services Register. The service is free to access and should mean that the broker you use works to the standards set out by the FCA.
For added peace of mind, you can also check to see whether your broker is registered with the Chartered Institute of Insurance Brokers (CII). The CII is a professional body so firms don’t have to join, but those that do have made a public promise to uphold the highest standards and put consumer interests first.
Independent insurance brokers are experts at what they do and will take the time to assess your needs. Unlike off-the-shelf policies which offer catch-all solutions, specialist insurance brokers help you find a policy that is specifically designed around you, your budget and requirements.
As well as tailored advice, independent brokers will have a wide network of contacts they can use to ensure you get the best value for money. In some cases, they may also have access to policies that aren’t available in the general market. It is a fact that we are living in a more litigious society and, for commercial customers particularly, using a broker also gives them a potential recourse in the unfortunate event of a claim not being paid (i.e. in the event the cover wasn’t arranged properly they have someone to blame).
Some insurance brokers will also handle claims on your behalf or at least act as an intermediary between you and the insurance provider. A few firms also have ‘delegated powers’ which means they are able to make decisions on behalf of some insurance firms which can speed up the claims process. This will often vary depending on the broker and the policy itself.
Costs vary from broker to broker so it’s important to check what these are upfront. Most brokers will be clear about what they charge – for example there may be an initial consultation fee. Brokers will also earn commission if you decide to buy a policy they have sourced, and you can always ask how much this is.
Whether an insurance broker is right for you will really depend on your circumstances. Using a broker can be beneficial in the majority of circumstances, for example if you:
- need home insurance. A broker will be able to help you accurately assess the value of your home and contents to make sure you aren’t underinsured.
- operate a business. Some commercial insurance policies are only available through brokers, and a broker will help you to fully understand your risks and the cover that you need.
- specialist insurance for items like; artwork, jewellery, classic cars and non-standard commercial policies like agricultural insurance and renewable energy.
Don’t forget that independent brokers often have access to deals and policies not available on comparison sites or on the open market. They can also use their network and experience to create cover that best meets your needs.
If you have complex insurance needs an local insurance broker could be of benefit as you’ll be able to visit face-to-face when arranging your policy.
For more information about how an independent insurance broker like Alan Boswell Group can help you find value for money on a range of insurance products, contact a member of our team on 01603 218000.