Insurance brokers are independent advisors who work for the insurance
buyer and try to find the best insurance policy at the lowest price.
Insurance brokers do not work for a particular
insurance
company and are thus able to comparison shop for the best deals. Because
insurance brokers are not restricted to any single company, they find insurance
policies with the most cover and at the best price. Insurance brokerage is generally
related to
short term insurance rather than
long term like life insurance.
Although brokers work for their clients, they are paid in the form of commission
by the insurance companies and not by their clients. Unfortunately commission percentages
and amounts vary between insurance companies introducing the possibility of bias
to insurance brokerage services.
Insurance consultants differ to an insurance broker in that they are paid
a fixed fee by the customer to shop around for the best insurance policy for them.
An
insurance agent works for a specific insurance company and is bound by
that company’s rules and responsibilities. Insurance agents typically work for direct
insurance companies.