What’s An Insurance Broker?
Choosing the right insurance plan for your company can be overwhelming even in the most straightforward situation. But wading through more than one insurance company’s plans and benefits, as well as costs, while trying to select what’s best for your business doesn’t have to be a monumental headache.
With the help of the right insurance broker, you’ll have a steady guide to walk you through the data—and they can continue offering support every step of the way.
But you’re probably wondering, what’s an insurance broker? We’re glad you asked. First, let’s break down the similarities and differences between an insurance agent versus an insurance broker.
What are insurance agents and brokers?
Both an insurance agent and an insurance broker are also known as insurance producers. Both agents and brokers must be licensed in the state in which they’re working, and both work on commission. Both are able to complete all the steps of an insurance transaction from start to finish.
Some insurance brokers and agents specialize in a particular type of insurance, such as commercial auto insurance or professional liability insurance.
The biggest difference you’ll notice between an agent and a broker is that an insurance agent generally works on behalf of a single insurance company to help match businesses or individual buyers with the right plans from that company.
How is an insurance broker different from an agent?
An insurance broker works on behalf of a business or individual buyer to choose the right insurance company and plan from several options.
Typically, insurance brokers do not have a contractual agreement with insurance carriers. This allows the broker to negotiate the best premium and packages possible for clients. They’re required by law to guide clients to the best coverage possible, not toward plans that benefit the broker’s commission.
An insurance broker’s goal is to help their client identify liability risks and then use that information to search for insurance companies and plans that line up with addressing those risks.
They will then give their clients information and options to make the right choice of insurance plans and benefits—while also securing a competitive premium or rate—for that client. A good broker can walk you through putting together a package with plans that include all the benefits you want to offer your employees, at a premium that’s right for your budget.
An ongoing relationship between you and an insurance broker means that if better options for your company become available, they can help you weigh the pros and cons of changing policies to take advantage of them. This saves your company money and also gets better coverage for your employees.
How do insurance brokers work?
An insurance broker will comb the insurance market and every major carrier, pulling a variety of plans with elements that work for your business’s needs. They will then present you with several options, offering cost analysis and assistance with any questions. Some insurance brokers, like True Texas Benefits, can also provide claims administration and other services.
You may think that only large corporations can engage the services of an insurance broker. But True Texas Benefits is an independent brokerage firm specializing in the needs of small businesses.
Insurance brokers work on commission, but they’re not paid by their clients. They receive from the insurer a percentage of the insurance premium cost as outlined in state law. A broker must represent the interests of their client—the purchasing business or individual—not the insurance company.
What is the role of an insurance broker?
From your initial meeting to closing the transaction, your insurance broker will assist you in answering your questions while negotiating on your behalf to secure the best outcome for your business. The result is a painless process with outcomes that work best for your needs.
Insurance brokers can help their clients find the right amount of insurance for their needs, which eliminates the risk for the insurance company of having underinsured policyholders. An insurance broker can also walk their clients through filing claims, reducing unnecessary claims that drive up premiums. These two measures also save insurance companies money, which means an insurance broker can usually find better rates on policies than an individual or business going directly to an insurance company.
As an insurance brokerage, True Texas Benefits can help your company implement your benefits program. We’ll educate your employees on their benefits, handle hard and soft benefits costs, as well as other key tasks.
What benefits do insurance brokers have over large insurance companies?
By working with an insurance broker instead of an agent from a large insurance company, you’ll be able to receive more, and better, customer service while having access to customized packages curated to the unique challenges small businesses often encounter. Your interactions will be focused on meeting the needs of your small business.
An insurance broker can not only save you time by researching companies on your behalf, but they can also save you money in the long run by being able to find the benefits you want to offer your employees at the best rate. It’s the brokers job to find insurance plans that are best for your business, without being limited to the plans available from one or two insurance companies.
What is the importance of an insurance broker?
Your expertise is in running a successful business. Most people aren’t experts in knowing the ins and outs of every insurance package available, or how to negotiate for the best premiums. By putting your trust in a reputable insurance broker, you’ll be leaning on the experience and negotiating power of someone who’s in your corner, not someone looking out for what’s best for the insurance company.
You’ll also have established a relationship with a trusted advisor who’ll walk you through the process, offering education and support as you help your employees enroll in their insurance plans and as you handle future claims.