We often get asked what the benefits are of using an insurance broker. The misconception is often that it is a more costly way of getting the insurance you need, due to there being a middle man involved in the process. However, this is not necessarily the case. In fact, a more bespoke package can often save money on unnecessary premiums.
Brokers work for you, not the insurer
The first, most important, point to make is that, as Insurance Brokers, we work on behalf of YOU, the Client, NOT the insurance company! This is the fundamental difference compared to a tied agent of one insurance company who can only offer advice on the products provided by that one insurer, and that advice is given on behalf of the insurer.
Claims management
In a case of a difficult insurance claim, the broker will work with underwriters on your behalf to ensure the claim is paid. It is in the broker’s interest to ensure the claim is paid because they work for you, the client. In comparison, when making a claim with a tied agent or single insurer, the claim is often dealt with by the insurers’ claims department where they do not know the client or the client’s circumstances and the agent has no influence on the process.
Access to the wider marketplace
Another major difference between a broker and a tied agent is that the Broker will be able to access the majority of insurers in the UK insurance marketplace, whereas the tied agent is only able to access the one insurer that they represent. At Acres, we have access to approaching 100 different insurers. The more complex the risk the more important it is that the person arranging your insurance is able to access the full marketplace, as we can use different insurers for different parts of your policy.
Rules and Regulations
Brokers are authorised and regulated by the Financial Conduct Authority (FCA). This places us under a very stringent set of rules and regulations designed to protect the policyholder. Possibly the single most important rule is that we must ‘treat customers fairly’. This has always been a fundamental part of our business approach. The tied agent is not directly regulated by the FCA but instead by the insurer they represent.
Impartial advice
One of our main principles at Acres is that of giving our clients impartial and independent insurance advice and we feel (and have been told) that we provide a valuable advisory service to our clients. Because we, as brokers, have access to the whole marketplace, we are able to provide impartial advice on a range of different insurance products from various companies, not just one. Understanding the whole marketplace is the best way to provide independent advice.
One of the other principles that we follow is that we will conduct a ‘fair market analysis’ for every risk that we quote on. This means we use our independent expertise as brokers to obtain a range of cover options and premiums for each risk we place. We will then make a recommendation to the client of which cover and premium level best suits your demands and needs. The tied agent is not able to do this, they only have one insurer to approach.
To see how an Acres’ Insurance Broker can benefit your farming business, get in touch:
