| Mike's Comments |
Feb 11, 2009What do brokers do? People often wonder, why should I use a Broker? I would like to explain what we do on behalf of our clients and clear up some common misunderstandings about our profession. First and foremost, our role is to bring two parties together to complete a transaction. This is the function of all brokers or intermediaries. In our case, we represent you, the customer, in finding the appropriate coverage for the risks you face every day, at a reasonable premium. We also have a second obligation to our Insurance Companies to pass along all information relevant to underwriting risks - this means helping the underwriter determine what coverage they will provide, what conditions they will place on their coverage and what premium they will charge. We in effect have what is called 'Dual Agency' meaning we must pass all relevant information in both directions, governed by the principal of Utmost Good Faith. This principal means a standard of honesty and candour above and beyond normal business transactions. Simply put, we must pass along all information and not hold back relevant information simply because we wern't asked. This principal applies to the customer, the broker and the underwriter - all parties to the Insurance transaction. On a day to day basis, we give advice and assistance to our customers, including quotes, coverage alternatives, reporting and assistance with claims, negotiation with underwriters, rewriting of coverage from one company to another where circumstances warrant and assistance with managing risks for personal and business clients. This takes up the majority of our time; in general we spend about 4 times as much time in doing servicing work than we do in sales. Some advertising has tried to imply that we are more expensive than 'going direct' to the company. I would challenge that by asking how these alternate approaches save money when they must employ staff to handle day to day service. We handle the majority of these transactions on behalf of our companies, thereby reducing their staffing requirements. A far greater amount of your premium goes to paying claims than it does to sales/administration costs. In addition, the call centre approach used by many 'direct writing' companies has not proven itself to be effective as many consumers are very dissatisfied with having their time wasted on hold and/or having to explain their situation repeatedly to different people in a call centre. You don't have to do this with a Broker who knows your situation. Finally, we are required to have a high level of knowledge to acquire a licence, and are required to continuously update our knowlege. This gives us a better understanding of what is going on in the industry so that we can help you better understand the changes that happen over the years. You have one place to call and someone who is dedicated to the profession to help you out. There are many years of experience combined in the staff of our office and our goal is to make you feel you have made the right choice by dealing with us. Let us put this experience to work for you. Michael Stuart, BBA, FCIP, CRM, CAIB Grant, Jones & Stuart Insurance Brokers |