Unless you work in the insurance field, it can be very confusing. Our rates can go up out of nowhere for no apparent reason. Deductibles confound us more than anything. It appears we meet our deductibles after an accident or doctor’s appointment, but then we still get bills down the road. No matter what the insurance is for, you need to get it as cheaply as possible because it will not cover everything.
When shopping for insurance, many people go to a local insurance company for the convenience. Maybe you have family that gets their insurance through them as well, so you feel comfortable with them being your insurance agency. You ask them what type of rates they can provide you. The actual agent will discuss with you that a higher deductible can bring down your payments, then you sign with them to represent you for your insurance needs. There is not much negotiating, but there should be.
How often does your insurance help you out? How many times do you make an insurance claim a year? The most frequent would be probably your health insurance. Any time you have a doctor’s visit, they cover part of it. Car insurance mostly seems a bit underhanded anyway. You have car insurance in case something happens to your car, but then when you make a claim, your car insurance rates go up. It doesn’t seem fair. Most people will get a dent or two on their car and not even bother to report it because of this.
The main question is how can you save money when shopping for insurance. That’s is part of the problem right there. Why are you entering a field that you know close to nothing about? Let somebody else do the shopping for you!
Insurance brokers do just that. Insurance brokers work with multiple insurance companies. An insurance agent is only representing the company that they work for. Brokers can offer a wide range of insurance quotes to their clients. They can work with the client’s budget better than what an agent can do. An agent is basically working for the company that hired them, a broker is working for the client.
If there is a claim, the insurance agent is doing what is best for the company that they are employed with. The agent is usually getting some sort of salary and is receiving a commission from their clients. A broker makes a living off of straight commissions.
You have to wonder who is going to give you the better deal in the long run. Car insurance is not complicated. A broker can find you the best deal possible while the local insurance agent is representing only their company. The amount of claims you will make are minimal, so it does not matter if your car insurance is bought local or not. There won’t be much contact going on either way.
Mortgage insurance is much the same. If you fail to put more than twenty percent down on a purchase of a home, then you usually pay for private mortgage insurance (PMI). Lenders are protected by the mortgage insurance in the case that you default on your loan. It is not difficult to find a mortgage insurance broker who can instantly calculate your savings when you go with them instead of the local insurance agency.
Health insurance, especially in this day and age, can vary greatly. Some companies will give you quotes where you are paying a thousand dollars or more a month on your premiums. It would be wise to meet with a broker that can have access to many insurance companies instead of being tied down to just one. In doing so, you could literally save thousands of dollars a year!