I was having an interesting conversation with a client the other day that prompted this posting, and I think it has a ton of value given the current state of affairs.
The basis of the conversation went like this (and yes, I am paraphrasing): my client asked me “for what I pay for insurance, what portion of that is a broker fee and is this something I can do without you?” Before I get too far, I want to point out that this particular client has been a great client for a long time and meant no ill will- he is looking at his bottom-line and we were meeting on how he can cut costs. Something I’d encourage everyone to do given today’s economy. Personally, I LOVE fielding questions like this, and I’m sure many of you have had the same thought flow through your minds as you navigate the frustrating world of insurance. And to be completely honest, you 100%, ABSOLUTELY, WITHOUT A DOUBT, should be asking these questions. After all, this is YOUR money that’s funding premiums and you should be getting value out of your investment in the policy and consultation.
For starters, with most insurance policies (at least the ones that we deal in), there is no broker fee. Not one cent of what you pay goes to the broker- at the end of the day, our advice is absolutely free to you. If you’re currently working with an insurance broker who is charging you broker fees for their advice, I would highly recommend asking around for a replacement.
The “no-cost consultation” is likely one of the biggest reasons most work with insurance brokers. Let’s be honest, insurance is dry, boring, confusing, frustrating, expensive, and a pain general. If you can have an expert wade through the headache to find you the most applicable and least expensive coverage AND not charge you anything for his/her work, then why would you not??? To quote a mentor and friend, Paul DeSpirito, “Giddy Up!”
Now, this brings me to my next point, and likely the most important part of this entire posting: If you’re going to work with a broker (and you absolutely should), make sure they’re attentive and have your best interests at heart. This is a MUST! Believe it or not, our industry does have some bad-eggs or lazy members in it. Maybe you’ve met one or two of them, maybe you’re working with one now. Both of these qualities are BAD when dealing with a broker for your insurance. Solid ethics are a no-brainer when it comes to insurance. At the end of the day, this industry is very simple when it’s broken down to what each individual client needs. Unfortunately, there are brokers out there who will muddy a portfolio with the sole intention of increasing the profit to the broker. This is NOT good, but it happens to thousands of people each and every day. It could be happening to you right now. If you’re unsure of your coverage, ask your broker to lay out every detail of the policy. If there’s extra riders or coverages and you have no idea why they’re there, this might be a good time to make a switch. It’s a hard pill to swallow to admit you’ve been taken advantage of, but DON’T let it continue. Drop the hammer!
Finally, you want to work with a broker who will keep you on your toes. You want one who will be continuously shopping the marketplace for a better product with a lower premium. This industry is CONSTANTLY changing. Even in the midst of this pandemic, carriers are rolling out new and more cost-conducive products that might be perfect for you, and if your broker is not bringing them to your attention because “it’s not your time of year to review” or “you’re already content paying what you are” or “the policy you’re currently in is fine,” they’re doing you a disservice.
Some brokers, sometimes those who’ve been in this industry for a long time, are very comfortable where they’re at. Change means more work- it means potentially opening up your mind to new alternatives that they’re not licensed to provide, which means potentially losing a client and losing renewals. Instead of staying up to date with the times and marketplace, they’re happy keeping these solutions under wraps, where they hope you’ll never hear about it anyway. We unfortunately see this all too often. If your broker currently isn’t evaluating new alternatives and consistently communicating and bringing new options to the table, this could be a good time to go broker shopping!
At the end of the day, working with a broker could be the best decision you’ve ever made. Just make sure you hold them accountable for staying on point with what YOU want and need and make sure they’re someone devoted to consistently bring you the best options.