What Is The Most Important Question to Ask

The most important question a client can ask themselves when selecting an insurance broker is a simple question, yet it’s one most clients fail to consider when selecting a broker. The question is this: “What type of insurance agent do I want to represent my business?” There are two choices, yet there is a world of difference between the two types of agents.

Do I Want a Professional Insurance Broker,
or a Simple Policy Peddler?

What are some of the key factors that differentiate
between the two types of agents?

A “Policy Peddler” is an agent, or agency, that treats insurance as a commodity – in short, the Policy Peddler makes no differentiation between policy contracts outside of price; they are all the same in his or her eyes. Unfortunately, this is the type of agent historically associated with the insurance industry. These agents are the ultimate salespeople and can translate their sales skills into any sales-based. For example, they could just as easily be selling copiers, cars, timeshares, or hardware. In fact, many of these agents have previously worked in sales for other industries. Sadly, because of the prevalence of this type of agent, many clients are now programmed to think of insurance as a commodity, or something they “shop” for no differently than copy paper, office furniture or a new pair of shoes.

A Professional Insurance Broker recognizes that insurance policies are legal contracts that can and should be written to address each client’s unique characteristics and needs. There’s an old adage which states: “You get what you pay for” – never has this statement been more accurate than when applied to insurance policies. Insurance policies are complex documents, and while one policy may appear to be interchangeable with any other policy, there are almost endless ways that an insurer can tweak the language of the contract to ensure that certain perils and exposures are either outright excluded, at worst, or heavily limited in scope, at best.

A Professional Insurance Broker makes it his or her job to understand the many different types of policy contracts and ensure the client receives the type of coverage needed for the client’s needs. The Professional Insurance Broker will explain the policy differences to the client so that the client is educated on what they are buying, and if the client wishes to exclude a certain peril the Professional Insurance Broker will make sure the client understands the ultimate exposure.

A Policy Peddler remains focused on price at the exclusion of all other considerations. In the end, the client may save a few dollars on the front end and may possibly avoid any significant problems in the absence of claims during the policy period. However, more often than not, when claims arise that should have been covered from the client’s perspective, any savings realized on the front end of the insurance purchasing process are eliminated as the client pays for the lack of coverage out of pocket.