An insurance broker is a professional adviser of products who transacts insurance with a range of companies on behalf of a client. As independent advisors, brokers will act on the customer’s behalf, and as such have a duty to advise independently (unless a tied agent) and professionally. Insurance brokers are professionals with experience, knowledge, and expertise you can rely on. Their independent status means they will not be tied to any one insurer. This allows them to select from a whole range of car insurance companies and underwriters to suit your needs.
Their rates will depend on their ability to provide new business to its various insurance companies. The better the business, the better the next set of rates. This is not to say direct car insurers are any less professional, but the onus is on the customer to ensure they have been given what they want and are happy with the quote and the product.
- A broker will advise you on what is likely to be the best car insurance quote.
- A broker will tend to offer a more complete service than a direct car insurer which will include offering independent expert advice on insurance products.
- Their advice can range from dealing with the legal paperwork, searching for the most appropriate policy from their panel of insurers, negotiating cover, providing impartial advice and sometimes, dealing with car insurance claims. This extra personal service usually does not cost more than dealing with a direct car insurer and many customers prefer to arrange their policies this way.
An intermediary will advise individuals and companies on their car insurance needs, and will then negotiate and arrange a policy on their behalf. Car insurance brokers and Intermediaries currently offer rates from around 40% of the market; the rest has been taken over by direct car insurance companies. They will have a fixed list of insurers to choose from and will usually pick one that balances satisfying the customer need for cheaper car insurance and the brokers need to maximize their income through commission.
Whereas a direct insurer will have a very specific type of customer they are trying to acquire, brokers will offer a far greater spread of insurance policies and as such are more likely to be able to satisfy wider or more diverse types of risk.
Direct insurers, brokers, and intermediaries are all making use of the internet to offer online quotes. This can offer the speed, convenience and written proof, which telephone calls perhaps can not.
