In this day and age, we can research any topic before we make a purchase decision. Insurance is also following the same trend. However, while buying insurance is easy, claiming is a totally different story. Certain types of insurance are far more complicated than others at claim time. It will save you tremendous amount of grief if you have someone to work along side you to negotiate with the adjudicator on your behalf. The question is how you find the right broker.
Watch for unethical or uneducated brokers
Insurance is sold on a commission-based system for brokers. Here are a few clues that may help you spot the ones who are just trying to make a sale, as opposed to looking out for your best interests.
Too good to be true
Suggesting that you should go with the cheapest options to earn your trust and make the sale. All insurance companies are insuring the same crowd (working Canadians) and the actuaries calculate the premiums based on the risk of this same group of people. There is always a reason why one plan costs more or less than the other. Your broker should be able to educate you on these differences and help you identify the crucial riders, while excluding others to save you money
Badmouthing other brokers
Insecure brokers will discredit their peers and try their best to make them sound bad. Over-aggressive slander is a sign they are just trying to say anything to secure your business. Brokers make recommendations based on their training and claims experience. It is not unusual for two brokers to provide different recommendations to the same situation.
Frequently trying to replace your plans
The commission paid in the year an insurance product is sold is usually higher than renewal commissions in subsequent years. If your broker frequently suggests that you should flip your insurance to different carriers, they may be trying to churn the business so they can earn more commission with a new sale.
Most insurance products are brokered. That means you will pay the same premium whether you work with a broker or not. We think that finding the right broker is far more important than finding the right insurance product. We will talk about the type of questions to ask your broker in the next article.
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