An insurance broker works as an intermediary between you and an insurance company. They are not hired by a specific company, but instead are approved by several different ones to sell their products. When you search for insurance, a broker provides you with quotes from several different companies.
The Job of an Insurance Broker
Insurance brokers are independent third-parties you hire to assist you in your search for a policy. They are not employed by a specific insurance company and, as such, can provide you with quotes and other information about policies offered by several different companies. Essentially, you contact a broker, tell him about your insurance needs, he researches policies for you, and then provides you with information about the policy and its cost.
A broker will also assist you in renewing your policy. They will inform you of the date that your current policy expires and help you to complete the correct paperwork to renew it, if desired.
They are essentially your employee, but are paid directly by the insurance company for whom they sell a product to you. The amount the broker earns depends on their contract with the insurance company and the type of policy they sell you. It is unlikely that a broker will charge you - the consumer - for their services.
Brokers must be licensed to sell insurance by the state in which they operate. Usually, a broker cannot sell insurance outside of the specific state in which they are licensed. Most brokers, however, are licensed to sell insurance in several, contiguous states.
Brokers vs. Agents
Brokers differ from insurance agents. An agent works for a specific company and only sells their policies to interested buyers. If the company the agent works for does not have a policy to suit your needs they will not sell you one. They do not compare their policy's cost with other policies' cost.
Types of Insurance Policies that Broker's Sell
A broker can sell any type of insurance: life, home, car, health and even business. Usually, a broker can sell the four types of insurance without needing separate licenses to do so, but most states require business insurance brokers to have a special license.
Why Use a Broker?
A broker helps you find and compare several different policies. After determining your insurance needs, they research each company with whom they are affiliated to find policies that provide the types and levels of insurance you need at a cost you can afford.
A broker, therefore, does a lot of the hard work of finding and investigating insurance for you. When you hire one, you do not have to spend as much time uncovering and comparing policies, but can instead limit your choices to the one that best fits your needs.
Additionally, brokers are free - at least, to you. They do not charge you a fee, which means that you do not spend more to find insurance. Most insurance companies pay a flat fee to brokers for each policy they sell; this means that a broker generally does not have an incentive to sell you one specific policy over another. This reduces the likelihood that you will purchase a policy that does not fit your needs or which is too expensive.
Selecting a Broker
If you want a new insurance policy but don't want to spend the time or energy searching for one, seek the help of a broker. An insurance broker will discuss your insurance needs with you, research available policies, and help you decide which one is best for you. Start your search by visiting the website for the Independent Insurance Agents & Brokers of America.