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What is an insurance broker?


Denver Insurance Brokers are professionals that act as an intermediary between a consumer and an insurance company. Insurance brokers can help you find a policy that best suits your needs. Insurance brokers are known to represent consumers rather than insurance companies. This also means that insurance brokers cannot bind coverage on behalf of the insurer. This is the role of insurance agents, who represent insurance companies and can complete insurance sales.

How do Insurance Brokers Make Money?

Insurance brokers make money from selling insurance and get commissions off of those insurance sales. These sales are done to either individuals or businesses, with most commissions being between 2% and 8% of premiums. This will depend on state regulations, but will always be within this range. Brokers sell all insurance types, including health insurance, homeowner insurance, accident insurance, life insurance, and annuities.

What to Know About Insurance Brokers

To practice as an insurance broker, you are required to have a state license. When you hire an insurance broker, they work directly for you rather than with an insurance agent who works for a specific insurance company. Purchasing insurance can be difficult, so a broker can do research and help you choose a policy. Despite this, an insurance broker cannot sell you a policy, instead, they will refer you to an agent or insurance company.

Brokers Representing Clients

When you hire an insurance broker, they are supposed to represent your best interest. This means that they must understand your situation, needs, and requirements, and finally to find you the best insurance policy in your budget. Although this can be complicated, when you choose a plan on your own, you may not pick the best option for you.

Brokers should never favor any specific company. This is why brokers are paid on commission versus specific company payments. Brokers know that they hold an important responsibility to help you navigate between insurance plans. Although there are small differences, these could make a world of change should something detrimental happen in your life.

Insurance Regulation

Insurance brokers are not only required to be licensed by the state they operate in, but also must state up to date with changing regulations. This means that an insurance broker’s license must be renewed on a biannual basis. The job of an insurance broker only begins after the policy is sold. Insurance brokers must regularly meet with their clients and determine if the policy meets their needs.

Should You Hire an Insurance Broker?

Hiring an insurance broker is typically the way to go because brokers represent and work on behalf of consumers. Alternatively, agents represent and work for insurance companies. This means that brokers cannot complete a sale of insurance, and are more likely to keep your best interest in mind. Having said this, it means that you cannot obtain insurance from a broker. Once a broker has done all of their research, the policy selected must be bound by an insurance agent or company.

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