What is the role of an insurance broker

kah22

Not the cheapest way to insure your home, home contents and car but up until now I've used a local broker.

Recently I had to make a claim on my home content insurance (£1800), but found that when I went to the brokers office that his assistant was less than helpful and I think less than knowledgeable. All she was able to do was give me a claim form.

No word has come through yet on the claim, but I would expect to hear something within the next few days.

The experience set me to thinking what is the role of an insurance broker? Especially what is his role when it comes to a client making a claim and, if necessary, contesting the amount that they may offer.

Insurance is like a lot of other things you never think about it until you have to.

As always many thanks for your insights

InsideInsurance

The "problem" is that the term(s) insurance broker/ intermediary covers a massive range of types of entities.

The most basic types do little more than data entry with the insurers on the panel and the software doing everything else.

At the other extreme you have brokers/ intermediaries with delegated authority from insurers who can adjust pricing, pay claims etc on behalf of the risk carrier.

Brokers have a significant conflict of interest to deal with as they work for both the customers and the insurers. They want to win business for the customer and have a duty to represent them. On the other hand sell a policy from X rather than Y for only an extra £5 and they could double their commission, they may also have profit share agreements so helping you get big claims settlements goes against their desire for the insurer to make profit.

Because of this the FSA introduced the ICOB rules to regulate these things more strictly.

As to what I expect a broker to do in the event of a claim..... for a good broker I'd expect them to check everything is completed correctly and you're advised on what you can and cant claim for prior to everything being submitted. Then for them to chase the insurers for timely responses.

dacouch

Which Insurer are you with and which broker

dogbot

It depends on who the local broker is. Are they true independents or actualy just one of the very few large chains?

A 'local' broker fundamentaly should in my mind:
- Get to know their clients and advise on their potential need for insurance or other risk related services
- Search the market for the best value deal for that client to fill a particular insurance need
- Arrange that insurance for the client (set up the policy, pass on all information, paperwork and money)
- Offer assistnace at time of claim by helping you put the claim to the insurer honestly and correctly to ensure a valid claim goes though
- Provide further explanation if a claim is declined for some reason or help you push back if a decline was unfair
- Re-broke at renewal if appropriate
etc
Bear in mind that at some times during a transaction they are working as the agent of the insurer however - when collecting or passing on money, collecting information on the client etc. Edit - as indicated above, there can be different comission arrangements, so don't be affraid to ask for details if you are curious.

You should expect from them the kind of service that you have described I think - but as with any business it sadly can be a case of having to hassle them for it a bit, and sometimes for them to correctly manage you expectations. If the claim is simple then they should explain that the best thing for you do to is just fill in the form or phone the insurer (really, phoning the insurer is what they should have got you to do since its quicker) and advise if you have any questions they are there to help. For something larger/more complex they should be able to offer a bit more help and advise.

You say you spoke to an assistant - call the manager and explain as you did above that you have been loyal to them and paid a bit more to get the service at times like these so please could they help you out and provide it. Remind them that if you get the help you are after you will be recomending them, but if not... Just remember to disengage their service from the response to the claim of your insurer and judge each accordingly.

Quote

InsideInsurance wrote: »

On the other hand sell a policy from X rather than Y for only an extra £5 and they could double their commission.

There aren't many insurers these days who will pay twice as much commission as another insurer, even if you look at two ends of the spectrum.

InsideInsurance

Quote wrote: »

There aren't many insurers these days who will pay twice as much commission as another insurer, even if you look at two ends of the spectrum.

True in most cases, though not all, but exagurated to make the point.

Was looking for a PMI/ Cash Plan option at one point for a white label solution and one intermediary offered circa £20 a sale where as another was offering £25 per lead! Obviously the second were going to !!!!! the customers data to all and sundary but certainly big differences can be involved.

Sally_A

It's because we are worth it

Many of us will have done exams and will be able to present claims from a different angle (I hate brokers that farm out claims to complete duh brain call centers and will not intervene :mad::mad:).

I know the products I sell inside out - frequently better than insurance company employees.

As I have quoted before, it doesn't matter how pretty the spiel and the policy booklet is, will they do the do when the manure hits the windmill???

kah22

Thanks for all the input.

Received a cheque in the post this morning from the company, Legal and General, for the full amount less the first £100 so I'm reasonably happy.

The people I deal with were originally a family based firm. Over the past few years they merged with other local insurers and set up a company called 'The Insurance Partnership.' but how they operate in practice I don't honestly know.

My policies usually fall due around Christmas time so it will be interesting to see what sort of a deal they can get me after the claim above or if I'm going to be stuck paying a higher premium just because I made a claim.

This time I will be checking out online insurers.

As always many thanks for the help.

Kevin

dacouch

L&G are a pretty good Insurer (One of my favourites), if you need to claim in future, you can normally give them a ring (The number is in your policy booklet) and they take the details over the phone and start processing it rather than filing out a claim for and it being sent snail mail

dacouch

See if you can spot any errors in Honest Johns answer...

Modifications and the insurance rip off...
I recently bought a mesh infill for the grille on my S Type Jag; all above board - reputable specialist supplier etc. I thought I should tell my insurer of the 'modification' rather than have it come back to bite me later.

Expected no effect on the terms for a minor cosmetic modification costing £60 and 20 minutes work by a 10 year customer (on two cars) with no claims. Did the bulldog say, 'Oh Yessss?' No, his computer said, 'another £140 pa premium and extra £200 excess please.'

Obviously I immediately changed insurer on both cars (to see net saving anyway).

Is this the 'private equity/banks' thing again that makes insurers care only for new customers always at the expense of existing ones? Should we all change annually as a result? And was I naive to advise them?

Answer

Yes, Private Equity Funding and simplified procedures leaving the clerks (or the automated system) no option other than to hit you for daft money. This is more likely to come from the broker than the actual underwriter. Private Equity invests in the middlemen, not the underwriters, because the middlemen is where the real money can be made

http://www.honestjohn.co.uk/askhj/answer/21034/modifications-and-the-insurance-rip-off-