Insurance Brokers - Bridge Between The Gap

Posted by Mords1944 on November 30th, 2020

The term broker traditionally refers to a person or entity acting on behalf of a buyer or client known as the principle. The broker uses their knowledge and expertise to advise the client on a particular decision that usually pertains to buying and trading. The broker can either play an advisory role or can also have complete purchasing and decision-making power to act on behalf of the client or the principle.

The most common type of brokers are investment brokers and commodity brokers. People who want to invest their money and trade in commodities rarely have the knowledge and time to manage their investment portfolio closely, so they use brokers like these who have much more insight and expertise to trade on their behalf. However, there are many other types of brokers who also give people their input of knowledge and expertise. Other examples of brokers include business brokers, Forex brokers, real estate brokers, insurance brokers and many more.

However, the term insurance broker is very vague. In the past, insurance brokers were like any other broker, but specialized in insurance policies. They would act on behalf of the principle / individual who employed them to examine different insurance options from different insurance companies to ensure the best deals for the principle as well as help interpret certain formalities within insurance contracts. Eventually, a trend developed where insurance brokers did not necessarily look for the best of the principle and wanted to favor certain insurance companies. In fact, many insurance companies positioned themselves as brokers to obtain preference for fraudulent and uninformed persons. As a result, the concept of insurance broker has evolved into one with a much broader meaning. Today, an insurance broker is essentially considered to be any person who acts as an insurance agent on behalf of the principle, whether the agent acts in principle or in the interest of a particular insurance company.

In fact, the term insurance broker is hardly ever used to refer to an agent who is employed by people seeking the best insurance deals. Today, it is used more accurately for employees of insurance companies representing the clients of that company. Insurance brokers still represent insured persons, but instead they are hired by the insurance company itself to handle claims, legalities and transactions between the insured and the insurance company. Therefore, most brokers represent only one insurance company and trade in the interest of the insurance company that they represent. The broker essentially acts as an intermediary who communicates the interests of the insured to the Versicherungsmakler company, administers the coverage procedures and ensures that the insurance contract is complied with.

In conclusion, the existence of a broker is very necessary for both the insurance company and the insured, as they assure that neither party violates the insurance contract and ensures that the procedures are followed. The insurance broker also makes it easier for the insured to communicate their interests to the company and successfully make claims if the need arises.