Insurance brokers are typically significant when it comes to comparing insurance quotes. It’s through this people that you can know better about the different insurance carriers available in the market.
Insurance brokers can also help you to spend a reasonable amount of money on your insurance coverage as they can possibly help you in comparing different quotes. But still there are some certain things you really need to avoid in these people. With that said, here are a few red flags you probably need to avoid when selecting an insurance broker.
Selecting One Best Broker
Probably, the biggest mistake in the insurance market is when risk or insurance team runs a tender for a particular renewal, select one broker and then going to the market with that single broker. The lies brokers tell their clients about limited market capacity are just hilarious and they can do anything to avoid honest competition. Selecting the best broker is an oxymoron since whether a broker is good or bad, is not a risk management decision but a market decision.
A broker is referred to be good when he or she brings the best quality coverage at an affordable price. Yet, it is very impossible to choose a broker before you go to the market. The only sensible way to select the best broker is to shortlist 2 or 3 of them, divide the available market and let them bring the best coverage for the best price.
Selecting a Global Broker instead of Many Local Brokers
Another mistake made by most individuals is not diversifying brokers and giving most or all insurance renewals to a single company. Broker relationships just like any other investment need to be diversified across the insurance lines as well as time. Also, don’t fall in love with your insurance broker as they all offer more or less the same service once you shortlist the good ones.
It’s also a huge mistake to get your local broker office to engage in overseas insurance lines. Brokerage is all about broker-underwriter personal relationship and long distance relationships don’t work. Broken telephone games also don’t work when placing insurance.