Insurance is an important part of being both an adult and protecting your life. There are many instances when you may look into using Denver Insurance Brokers, but it can be hard to know when to do so if you do not even know exactly what an insurance broker is.
What is an Insurance Broker?
An insurance broker is an intermediary between you and an insurer. They have your background, what you need, and your budget, to ensure you get exactly what you are looking for, at a price that you can afford. Brokers are known to save you time and money, but you may also need to pay them a service fee.
When to Use an Insurance Broker
Using a broker is not always necessary. How you buy insurance is often very personal, but people who use brokers typically need more than the average plan. Oftentimes someone like a landlord or small business owner will need multiple policies, and call a broker to help them put them all into one.
You might benefit from an insurance broker if you have multiple cars and homes, want to understand your policy better, or need business insurance. It can also be good for those who want to look at multiple policies and want someone to help you through the process.
How Payment Works
There are two main ways that brokers get paid. Similar to real estate agents, insurance brokers can get paid through commissions and broker fees. Commissions are fees paid from an insurer. They will give them a flat fee based on the policy as a percentage. This is typically the largest when it comes to the first policy sold. Life insurance is extremely valuable when it comes to commissions. Broker fees are paid by you, the insurance holder. Legally they must disclose it to you beforehand, and there may even be restrictions to protect you. They are nonrefundable even if you do not go through with your policy.
The Difference Between a Broker and an Independent Insurance Agent
Insurance brokers are not the same as independent insurance agents. Both brokers and agents work with different companies and earn commissions, but independent agents make their money completely from commissions. They both make more money when you buy more coverage, so bad agents may try to upsell you. Despite this, they both need to attempt to keep your business in order to continue making money.
Independent agents work with more than one insurer, but in some cases, they might have contracts with specific companies. This can mean they are limited to selling specific policies, while brokers can sell whichever they like. This is why brokers are typically a better choice.
