Why Use a Broker?
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You are a new homeowner. You just bought a 36-foot cabin cruiser. You’ve finally finished restoring your 1957 Chev Impala. You need insurance and you have a pretty good idea what kind of coverage is necessary, and you know you don’t want surprises if ever you have to make a claim.
What you don’t know is which company will give you the best advice that you can really trust. Are they professionals? Are they experienced? How much insurance do I need? Is cheaper just as good? Should I buy from a direct seller, an agent, or an independent broker?
First, let’s look at who sells insurance. For example, Park Insurance is an independent insurance broker. If you bought from them, would there be any advantages?
When it comes to insurance, you basically have three choices who you can buy from:
- Directly from an insurance company; sometimes they are the cheapest but you have to know their limitations.
- Through an insurance agent who represents one insurance company only, and is limited to offering that company’s products and services.
- Independent insurance broker who has access to a variety of products from numerous insurance companies.
Direct sellers are insurance companies that sell their products and services directly to the consumer, such as a bank who sells insurance on-line. Direct sellers do not use agents nor do they use independent brokers to sell their policies to consumers. Rather, their own staff will sell insurance products directly to you.
Direct sellers set the price of their policies, they decide who they want to cover (and who they don’t), they write their own policies, and they decide how much they will pay on your claim, if you have one.
Many people think it’s an advantage to deal direct—“cut out the middleman.” Unfortunately, it isn’t that simple. Let’s see why.
One of the limitations of direct sellers is that they give you very few choices. They only sell you their products or services. It’s like going to the paint store to buy paint for your dining room. The sales staff tells you that you can buy any colour you want, as long as it is a shade of white. If your insurance needs do not fit the profile of the direct seller’s product line, they will either sell you a generic product that they say is a “close fit,” or suggest you go elsewhere.
However, when it comes to protecting your assets, a “close fit” is usually a poor choice when you have to make a claim. No two homes or family assets are alike and your best protection is getting the appropriate coverage that is tailored to your unique needs.
In addition, even if you adopt the “cut out the middleman” approach, it doesn’t mean you will always save money. True, the independent broker gets a commission on the policy he/she sells, but it’s the insurance company who pays that commission—not you. In fact, in many cases you will pay the same price for insurance when you buy from a direct seller, as you would from a broker; it just means that the direct seller makes a fatter profit from you. After all, they’re the one’s cutting out the middleman, not you!
“Park Insurance has been a family-owned independent broker since 1950. We plan to stay that way.
We can serve our customers much better, as an independent broker, and give them the greatest value for their money.”—Bryan Fitzpatrick, President
The way your claim is handled by a direct seller is also critical to consider. When you make a claim, the direct seller is both judge and jury. When you make your claim, you appeal to the company’s “jury.” If you disagree with their settlement decision, you cannot appeal to the “judge” because he is from the same company! What ’s more, any money that they decide to pay you for your claim comes out of their pocket. You are not in a very good negotiating position. If you are unhappy with the terms of the settlement, who would you complain to? Who would advocate on your behalf? In some cases, you may need to hire a lawyer to resolve the matter to your satisfaction.
In contrast, when you buy insurance through an independent broker, you also gain an advocate; someone who will speak on your behalf. Whatever monies are paid because of your claim doesn’t come out of the broker’s pocket, which means you get the broker’s full support when making a claim. Your broker can be more objective about the fairness of a claim, than say a direct seller might be, and he/she will speak up accordingly.
It gets better! The independent broker will doubtless have many clients, maybe even a few thousand, with that insurance company. That means that you are part of a larger group of clients. When you insure through a direct seller, you are just a single customer to them. You have no particular importance or value to them beyond what you spend on your own policies. But when you buy through an independent broker, like Park Insurance, you are part of something much bigger, much more powerful. You take on the buying power and influence of hundreds, maybe thousands of fellow clients of the broker.
How does that work in your favour? How can your broker leverage their entire client base to your benefit?
If you are not happy with the way a claim has been settled and your broker doesn’t think it is fair either, when he/she speaks on your behalf the insurance company is much more inclined to listen, because the broker has hundreds, maybe even thousands of clients that he/she has placed with that insurance company. And an unhappy broker has the choice of transferring all its business to another insurance company! The insurance company doesn’t want that!
So, the insurance company that underwrites your policy is more highly motivated to keep you happy and your broker happy, because they don’t want to lose that bigger block of business from the broker. Again, if a direct seller loses your business, they only lose the business you bring to them.
Doesn’t it make sense to get Park Insurance on your side!
Insurance agents are authorized to sell only the products of the companies they represent. For example, if you became an insurance agent for “BigTime Insurance,” you would have to agree to only sell insurance products and services from “BigTime Insurance; much like buying a McDonald’s franchise—you can only sell McDonald hamburgers.
So, customers who buy insurance from agents are faced with many of the same limitations as with direct sellers.
So, what choice is left?
Based on the information above, you probably already see the main advantages of using a broker. Independent brokers put your interests first, before those of the insurance company; they work for you, not for the insurance companies.
In addition, an independent broker, like Park Insurance, represents a number of different companies and their job is to connect you with the right one for your needs. It doesn’t really matter to them which company you buy from (since the commissions are pretty much the same); what they really want is for you to be satisfied enough to keep dealing with them year after year. If your needs change, and another insurance company offers insurance that would be more appropriate for you, a broker is happy to make the switch for you.
At Park Insurance, our goal is to give you access to products from many different insurance companies to make sure you get the best deal, that is the best coverage at the best rates. But a good broker’s work doesn’t end there.
Scope of Brokers’ Services
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A broker’s services doesn’t end with the sale of the policy; their work starts prior to the sale and lasts until any of your claims are settled. For example, a broker will assist you to identify your risks and will recommend ways you can reduce or eliminate these risks. In turn, you may require less insurance than you thought. So, talk to us about your needs.
As an insurance professional, Park Insurance takes a personal interest in you. We work to forge a working relationship with our clients. We advocate for you when you have to make a claim. This is important because arranging a settlement after a loss can be a daunting and at times a frustrating process. Our personal attention to your needs allows us to smooth and simplify the process. (See Filing a Claim)
Additional services that Park Insurance provides include:
- Assessing your insurance needs, obtaining quotes, and making recommendations on the best coverage. Depending on the property being insured, this might include performing an insurance valuation, taking photographs or obtaining an inspection report;
- Revising policies at renewal or mid-term, if required;
- Ensuring claims are fairly handled; brokers can make a positive difference to the amount you are paid by the insurer in a substantial number of claims;
- Heading off potential claims or coverage problems by taking a hands-on approach to your insurance needs;
- Being on the alert for material changes that will affect the validity of your policies, and recommending changes, where appropriate;
- Providing administrative follow-up, such as mortgage changes, certificates of insurance,
- Being available to you in the event of loss – especially large, catastrophic loss – on a 24/7 basis.
In summary, Park Insurance is committed to always providing high quality, personalized insurance products and services to you. Please see About Us.
We are a full-service, independent insurance broker that has looked after the peace of mind of families and businesses all across British Columbia since 1950. Over the years, we have provided every type of insurance, regardless of how specialized or large the asset to be protected; from personal insurance, small business, corporate, liability, and much more.
Drawing on this depth of experience, along with our licensed and highly knowledgeable insurance agents, Park Insurance is uniquely positioned to provide all of your insurance needs.
Park Insurance is family-owned and we attribute our success to our customer-first philosophy, as well as our commitment to continuous improvements in both service and the type of insurance we provide. Most importantly, we believe that you should make an informed decision about your insurance protection. Therefore, we make sure that you know your options, understand your choices, and are getting exactly the coverage you need.
As an independent broker, we shop your needs to a number of national and international insurance companies so that we can consistently deliver premium coverage at very competitive prices. For additional details about our work and our company, please see About Us.