What Is The Duty Of A Broker?

A broker represents several insurers and tries to secure the best possible rate, claim service and service in general for their client. The broker has obligations to their employer, the insurance company and to you, the insured.

You choose to work with a broker for a number of reasons. You likely feel that your broker is competent in dealing with insurance, is open in discussions with you about your insurance and is concerned about you as a person. These feelings give you a sense of trust.

Your broker is your partner in the insurance triangle. The broker is firstly concerned about you, the insured. The broker works with the insurance company who trusts that the broker will provide full and accurate information. The insurer then produces a policy that reflects that information. As things change you relay this information to the broker who then passes it on to the insurance company. A broker differs from an agent or a direct writer who owes their first duty to the insurance company.

You buy insurance because you have to. You cannot drive your vehicle without insurance. Your mortgage company demands that you protect their investment with insurance. How well you are insured? What happens when there is a claim? This depends on the relationship you have had with the broker. If you have discussed the coverage you have and provided up-to-date information then there should be no surprises at the time of a claim.

Talk to your broker about your policy. Review your coverage each year to be sure you understand what you have. Ask about optional coverages. Most brokers will be checking on renewal to be sure that your pricing is still competitive - ask if this has been done recently.

What if my broker is not honest?
This can happen. In a worst case scenario it can lead to criminal charges against the broker. A broker in Sault Ste Marie was charged with five counts of theft and five counts of fraud in the first quarter of 2010 for allegedly misappropriating a client's funds

The broker was arrested and charged on March 9th of 2010 for his activities as an insurance agent between December 11 1997 and August 14 2002. The approximate amount of the fraud value is over $350,000 and involved five clients. This broker was acting independently in managing his cases and client services.

If you felt that things were not right then yes, contact the local association for insurance brokers and agents in your area. It could be that there is really something wrong that needs intervention.