Purpose of Insurance Brokers
Brokers and agents are the retail side of insurance. Some insurers underwrite insurance only through brokers, who obtain raw data from layman customers and fill in the complex forms which insurers need in order to thoroughly assess the risk they are being asked to underwrite. Some jurisdictions have special rules about how policies must be printed, assembled, and delivered to insureds, and brokers are responsible for such compliance issues.
Most importantly, insurance brokers assist prospective insureds with developing risk management strategies appropriate to their risk profiles. They work with insureds to find out what kinds of risks they regularly encounter, and educate insureds about what policies are available for each type of risk. Often, an insured may buy a regular policy plus endorsements or additional policies to fill in exclusions in the regular policy.
Insurance brokers also may help insureds obtain multiple layers of excess/surplus lines policies from different insurers over a primary policy, and can work through scenarios for reducing premiums with deductibles or self-insured retentions. For huge risks (e.g., the "slip and fall" risk of a multinational retailer with hundreds of stores), a single policy may not be available to cover the entire risk from the first dollar (or euro) of loss incurred. In the United States, if an insurance broker helps insureds obtain multiple layers of excess/surplus line policies, then the insurance broker also must be licensed as an excess/surplus lines broker.
Read more about this topic: Insurance Broker
Famous quotes containing the words purpose of, purpose and/or insurance:
“Respect is not fear and awe; it...[is]the ability to see a person as he is, to be aware of his unique individuality. Respect, thus, implies the absence of exploitation. I want the loved person to grow and unfold for his own sake, and in his own ways, and not for the purpose of serving me.”
—Erich Fromm (20th century)
“No further evidence is needed to show that “mental illness” is not the name of a biological condition whose nature awaits to be elucidated, but is the name of a concept whose purpose is to obscure the obvious.”
—Thomas Szasz (b. 1920)
“Women hock their jewels and their husbands’ insurance policies to acquire an unaccustomed shade in hair or crêpe de chine. Why then is it that when anyone commits anything novel in the arts he should be always greeted by this same peevish howl of pain and surprise? One is led to suspect that the interest people show in these much talked of commodities, painting, music, and writing, cannot be very deep or very genuine when they so wince under an unexpected impact.”
—John Dos Passos (1896–1970)