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You've probably had to purchase some type of insurance on more than one occasion, whether for your new car or your home. And to do so, you've probably wondered whether to check prices on online comparison sites, whether it's better to go directly to the insurance companies, or what the advantages of taking out insurance with an insurance broker through a brokerage firm. If you've never used the services of a broker, in this article, we'll clear up all your doubts and tell you what an insurance broker is and what advantages they offer.
What is an insurance broker?
You probably don't have many questions about what insurance companies are and what they offer. However, if you're reading this, the role of an insurance broker may seem confusing and complicated. It's actually quite simple; we can easily define this professional position as an independent intermediary who represents your interests by mediating between insurance companies and policyholders.
This independence means that the broker doesn't work for the companies, but for their clients. A broker, and this is their main quality, will get you the best coverage by searching among the various insurers on the market, with whom they have distribution agreements and are therefore independent of them. This way, an insurance broker can compare insurance policies, negotiate prices, and manage your paperwork with the company. When processing your claims, they will be your advisor and will defend your interests, not those of the company.
Finally, it is important to emphasize that it is a strictly regulated profession, requiring a degree and very specific training, being independent and impartial, and requiring financial guarantees to practice it.
Services offered by an insurance broker.
You should keep in mind that, if you hire an insurance broker, you are the client for the broker. As an expert professional, they act on your behalf as a mediator and interlocutor with the insurance companies. If you want to know what an insurance broker can offer you, these are the services they offer:
Compare offers from major insurers.
Compare the best insurance companies' offerings, whether based on coverage, features, price, or other quality factors.
Mediation and Sole Interlocutor.
Have a single point of contact for all your insurance company transactions and procedures. This includes contracting, renewal, claims, cancellations, policy changes, etc.
Professional and independent advice.
Professional advice on contracting, as well as help setting up your policy so you get exactly what you need.
Claims processing.
We all know that insurance policies have a lot of fine print, and sometimes it's difficult to interpret them. Insurance policies include aspects not covered that are difficult to understand. The help of an insurance broker in this area will allow you to better understand your insurance and effectively process your claims, ensuring that you claim from the company what is truly yours according to the policy.
So what happens to the price of my insurance when I go through a broker?
Basically, the first thing you should know is that brokers or brokerage firms make their profits through the income of insurance companies. They do this through brokerage, a term that refers to the professional activity performed by insurance brokers. In other words, the insured will not pay for the services provided by the brokerage firm.
Therefore, the price or premium of your insurance will not increase if you purchase through an insurance brokerage. It's a common misconception that purchasing through a broker increases the price, but it's not true. In reality, with a broker, the price can likely be lower and you'll still enjoy all their services. Although it may sound strange, the explanation is very simple. Brokerage firms process thousands of insurance policies each year, which allows them to negotiate with insurers differently than with individuals. Thus, a broker can obtain discounts or better terms on your policy due to their business volume.
In short, hiring a broker not only does not increase the price of your insurance, but it can also help you get more advantageous premiums and terms.
Advantages of hiring an insurance broker.
At this point, it's easy to see the many advantages of purchasing your insurance through an insurance broker or brokerage firm. Not only is it possible to improve the price through a broker, but you must also consider what we consider to be the most important aspect: independent professional advice.
Through this advice, the broker searches for the best offers from the major companies based on your real needs and budget. Once the insurance policies with the best coverage and the ones that best fit your needs and budget have been selected, their work doesn't end there. A good broker will help you correctly configure each of the important aspects of your policy. This way, you can rest easy and avoid being underinsured or overinsured. In other words, you won't be unprotected in the event of a claim due to not having properly insured certain risks. And you won't be overpaying for potential situations that you don't need to insure.
As you've probably noticed, hiring through a broker offers a multitude of advantages, as it increases your chances of finding quality insurance tailored to your needs and at a price that fits your budget.
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