If someone asks us what an Insurance Brokerage is and how it differs from any other establishment dedicated to selling policies, some doubts may arise. In fact, for someone who is not familiar with the insurance sector, it is possible to confuse what is a brokerage with the office of an insurer or believe that it is like a financial entity that sells insurance. And no, they are not the same. An Insurance Brokerage is something else. That is why today we are going to dedicate this post to clarify doubts and dismantle false myths about brokerages and insurance brokers.
To begin, it is important to note that there are notable differences between a broker and an agent of an insurance company. But fundamentally there are two characteristics that characterize the professionals of a Brokerage:
- They are intermediaries trained in Insurance that mediate between an insurer and the insured.
- They are independent professionals who work with several insurance companies.
The role of the Insurance Brokerages
An Insurance Brokerage is mainly dedicated to the mediation between the insurer and their insured, as an intermediary that defends the interests of their client.
For example, an online Insurance Broker offers policies for dozens of insurers, which allows them to advise their clients with complete independence and impartiality on the most appropriate insurance product.
In fact, the broker is responsible for carrying out all the client’s actions in relation to their insurance contract, from the moment of the search and contracting of the policy.
Myths about Insurance Brokerages
Although the role of insurance brokers is well defined by law, over time it is inevitable that false myths arise about their activity. Many times, ignorance generates false beliefs about the activity of the runners, which should be clarified.
Anyone can be an Insurance broker
An insurance broker is a professional who must have a specific training that is also regulated by law. Not everyone can practice as an insurance broker, must prepare before and comply with a series of requirements that guarantee their professionalism and solvency.
This is the best way to get the Insurance broker to be the independent consultant you aspire to be. This training allows them to advise their clients about coverages, policies and exclusions in the Insurance contract.
In addition, with its training it can advise clients on the compensation they can claim in the event of an accident and help them claim the loss to the insurance company, and speed up possible repairs and collection of compensation.
Brokerages only sell Insurance from a company
This is another myth that surrounds the figure of the Insurance broker. The truth is that any brokerage operates with various insurance companies, intermediating to find their customers the best policy in each case.
Because the brokerage does not depend on an insurance company or work for them. On the contrary: the Brokerage represents their clients and their advisory works are based on the independence of the broker. In fact, it will mediate in favor of the interests of the insured in the event that there is a disagreement with the company or problems when charging for a claim.
Hiring an Insurance in a Brokerage is more expensive than in the insurer
This is one of the false myths about the most established insurance brokerages. And yet it is totally false.
Everything has its explanation. In effect, the broker takes a commission on the price of the Insurance in each sale. But it is the same commission that an insurance agent would take.
The difference is that the Brokerage ends up managing the policies of many clients of the different insurers, assuming the capture and management of the Insurance.
The client who goes to a broker buys an Insurance with the advice of an expert who manages the procedures for contracting, modifying and canceling the policy. A person who, in addition, is usually the first person the customer calls when they have any problem or suffer a loss. Well, this is a task that companies no longer have to do and that is a saving for the insurer.
The Insurance Brokerage puts obstacles to collect the losses
False. Quite the opposite: the broker acts as the client’s representative before the insurer in case of loss.
In addition, the Insurance Brokerage manages the claims, but does not pay them. It is the insurer who assumes the risk and who has to compensate the insured, according to the terms established in the Insurance contract. The insurance company is the one that pays the loss.
In this sense, it is important that the insured be completely honest with his broker and provides all the necessary information to manage the loss. It is the only way that you can adequately defend the interests of the client.