5 Reasons Why to use an Insurance Broker
1. Familiarity
Are you familiar with the insurance product you are about to buy? If the answer is no, it is recommended that you make use of an insurance broker to provide you with objective advice. An insurance broker is an expert in the insurance field to provide best advice.
2. Your needs
Be open and share with the insurance broker all your requirements, relevant current circumstances or information to enable the broker to make a correct assessment of the product that will best cover your insurance risks. Whilst we know the Bailiwick is a small place and we prefer to keep our personal information private, the broker is required to treat all your information with utmost confidentiality, and should form part of the Terms of Business Agreement that you enter into with the broker.
3. Explanations you understand
Your insurance broker should make time to explain in simple English language all the terms and conditions attached to a policy that you are proposing to buy, and once you have agreed to buy the policy, to go over them again with you to ensure you agree to the terms and conditions of the insurance policy. Ask your broker if there is a cancellation policy applicable to your policy, so that if you change your mind you may cancel your policy within the period specified in your insurance policy.
4. Charges
Depending on the type of insurance you are buying, brokers may receive remuneration from the insurer from whom you bought your product, or if buying long term insurance, many brokers have moved to offering advice on a fee basis, which would be payable whether or not you take up their advice. Whichever the mode of remuneration, or charges, a broker advising on long term insurance is required under the Bailiwick laws to disclose the amount of that remuneration to you before you sign on the dotted line. When buying general insurance products through your broker, and the broker is silent on details of their charges and remuneration, you are entitled under the law to ask for these.
5. Making an insurance claim
More often than not, the insurance broker from whom you bought an insurance policy will assist you in making an insurance claim under that policy and liaise on your behalf with the insurer and the loss adjuster. You need only ask if they will provide this facility to you.
What is an Insurance Broker?
An insurance broker acts as a link between insurance companies and on your behalf as the client. When you are considering buying an insurance product but you are not familiar with its intricacies, it may be an idea to make use of an insurance broker. An insurance broker is not tied to an insurer unlike an insurance agent, who represents only the insurer(s) it acts for. The brokers’ profession requires them to act on your behalf and to identify your requirements to be in a position to scan/peruse the market to find a product or more that will suit your needs.
A cheap insurance policy is not necessarily the best option for you – the policy may come with a high excess and/or more exclusions, which you may only find out at the time of making an insurance claim.
Insurers are expected to highlight the key facts of a policy when you take one out, and your broker, if using one, should go over these with you to ensure you understand what the broker is proposing for you to buy and what you are expected to do over the length of the policy, if any special requirements apply – commonly known as “warranties”. Whilst it may be boring or not the best use of one’s time to read the lengthy terms and conditions, it is a contract that you will be bound to, so it is worth asking your broker to go over these with you. Insurers need to make a profitable business selling insurance policies, so they can carefully word exclusions into the terms and conditions and not cover your specific need for insurance in the first place – so it is best to be informed sooner rather than later. The insurance broker will be able to guide on what is best for you.
Comparison insurance websites allow you to compare different policies on the market, but not all insurers will be on the comparison sites – so it is not an exhaustive comparison of what is available on the market. Also to note, the comparisons websites do not compare like with like, so whilst a policy may include one feature, another may not. Such sites do not cater for the Guernsey customer – so be cautious when buying insurance over the internet. It goes without saying, that the cheapest policy is not necessarily your best option. Once again, the policy may be tied to a number of exclusions or high amount of excess, and you may not have the expertise to identify these.
For more information, please see the list of all licensed insurance broker companies (also known as “insurance intermediaries”) in the Bailiwick Guernsey – it does not give you the name of the individual “authorised insurance representatives” or “financial advisers” attached to a licensed insurance broker company in Guernsey – but from the link you may contact the companies to make enquiries on their advisers.
If you would like to find out more on insurance brokers you may use the following link to read the information provided by the Money Advice Service:
Money Helper - When to use an insurance broker.
Non-Guernsey Insurance Brokers
Insurance brokers based outside the Bailiwick of Guernsey are not allowed under our laws to approach you for business, but on the other hand you may do so, but to be aware of what to look out for and the pitfalls, please visit the Commission's FAQs page.
Making a complaint
If you are not happy with the service provided by an insurance broker, please make the complaint to the company first – for more information, visit the Commission's 'How to Make a Complaint' page.