A broker will do the majority of the hard work for you in sourcing insurance quotes. They will have considerable experience in finding quotes for different types of insurance for many different types of people.

This experience means they will know where to look, and will be able to spot missing areas or hidden charges on the fine print of the policy.

A broker can also advise you on whether it is worth taking additional cover, or whether you need specialist cover (E.g.: For a home office)

In the event of you having to make a claim, the broker will also be there as a source of advice, and can help ensure you get a satisfactory settlement in the quickest time possible.

(ii) Cost

As a broker deals with insurance companies on a regular basis, they have a vast knowledge of what a reasonable price should be. They also purchase large number of insurance policies over a period of time, and can often negotiate discounts which are then passed on to you.

                                                        "discount prices"

Even with brokers fees (which are often covered by the commission from the insurer), the discount prices mean that a broker can usually get you a better deal than would be available by searching yourself.

Disadvantages of Using a Broker-

(i) Risk of Bias

As brokers are normally paid commission by the insurers that they use, there is sometimes a risk that a broker may try to sell you the policy that is best for them. Thankfully, this is not a very common problem, and there are several bodies in existence to help combat it. (See "What to do if you have a problem")

Time

As brokers have to contact a number of companies, the process can take longer than a direct enquiry. When there is a query or problem, it has to go through the broker before it gets to the relevant person. This can cause delays to the purchase or alteration of the policy.

A broker also means that you are not in direct control of purchasing the insurance policy (although you still have the final decision with all policies), which may cause some problems if you wish to renew or change broker.

Article Index