Having an insurance broker you can trust and rely on is important. It puts your mind at ease, knowing that you are sufficiently covered and that your investments are protected.
We all want some sort of protection from the unexpected and unaffordable. But how do you know that your insurance broker has your best interests at heart? And if you haven’t got a reputable broker yet, how do you tell the bad ones from the good?
Some of the signs are pretty obvious. A reputable broker’s website should list all of the insurance companies they work with. If you don’t recognise any of these companies, that’s not a good sign. Is their website customer-friendly and does it provide reliable contact information? Are they an authorised financial service provider? Do they provide authentic testimonials?
Is your broker attentive to your concerns, and are they ensuring that you have the most thorough policies in place? Do they listen to you, and have they tried to build a good relationship with you? Do they follow through and follow up?
These are just some of many things to look at. And then, there are a number of other things to watch out for. Firstly, though, what is an insurance broker and what is an insurance agent?
An insurance agent could be employed directly by an insurance company or may even work independently. When opting for the latter, the agent will usually contract for a couple of insurance companies and only offer those policies to the client.
Insurance brokers, though, are entirely independent from insurance companies. Brokers will often work with many companies at once and will have access to a wider variety of products and policies. Since they’re not contracted to any specific company, nor hired by them, they’re essentially able put the client first. What are your needs? What is your budget?
It wasn’t too long ago that faux firms were pretending to be brokers, while in fact just representing their favoured insurance companies. Though times have changed, companies have become more diligent and it’s not that easy to get away with shenanigans anymore – one still has to be careful.
So how do we know if we’ve got the best possible broker? Here are a couple of red flags, tell-tale signs that you need to move your business elsewhere.
Salesmen are known to be aggressive. That’s their jobs. Consumers, though, aren’t all that stupid and are quite aware of this. So when a client is in negotiation with a broker, an ethical broker will present the options available and encourage the client to take some time and evaluate them.
They want you to be sure.
Beware the broker or agent who tries to swindle you and push you into buying a policy right away. They might say something like ‘this deal will expire soon’ or ‘the premium could go up.’
And to that, you simply say…
In any business, communication is key. If you’re leaving 3 or 4 messages a week with your broker before they finally get back to you, it’s not a good sign. Good brokers pride themselves on great customer service and a swift turnaround time. An efficient broker will, therefore, reply to your queries within a day or two. They are incredibly busy, after all.
Another thing; a legitimate broker will always respond to you via a business phone number and email address. If their company doesn’t even have a physical address, but just a PO Box, forget about it. Move on.
Any competent insurance broker should be able to provide you with a quote after you provide them with simple information. If you can’t give it to them over the phone or in a quick email, it’s probably not necessary.
A common trick employed by dubious companies is to ‘put the client through the ringer.’
By asking you to provide mountains of paperwork or lengthy documents, they’re trying to discourage you from one day taking your business elsewhere.
Because who wants to go through that hassle all over again?
Firstly, you’re entitled to ask your agent or broker for their credentials. Are they licensed and qualified? If a broker won’t answer any questions about their background or experience, how can you build an honest relationship with them?
And then we come to the product. Do you know what kind of policy you’re buying and do you know what it entails or covers? These are important questions to ask, after all. You want to be sure that you’re covered when you need it.
If your broker is incapable of explaining your policy or evades your questions, oh boy, you’re in for a bad time.
Product knowledge, in the industry, is absolutely vital.
Rates commonly go up and down from year to year. If you haven’t received a new quote in a couple of years, it doesn’t hurt to shop around a little bit. This will give you a good idea of what other brokers are offering. If it’s not on par with what you’re paying, speak to your broker and try to work out the best possible deal.
Why didn’t the broker already inform you that you’re paying too much? Perhaps your broker is loyal to certain companies. Or perhaps it’s because many brokers earn commission from insurance companies on the premiums you pay. The more you pay, the more they earn. So, that’s something to look at, as well.
A good broker will always try to look after you and your money. They will advocate for you and fight for the best possible rates, with an adequate amount of coverage.
By contrast, if you’re paying way too little for your premium, that’s worth a bit of suspicion as well. If something seems too good to be true, it usually is.
So, you’ve paid the premiums and you’re still waiting for the policy documents. You’ve asked the broker for them numerous times, and every time there’s some kind of excuse.
The broker might have collected the premium payments, kept them, and not informed the insurer. If you haven’t received the documents within a month, contact the insurance company directly and inform them.
Dishonest brokers or agents will sometimes also ask you to pay your premiums by writing out cheques in their name. This seems obvious, but any premium payment should be directed to the insurance company. You would be surprised how many people have fallen for this.
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