Insurance intermediaries: After a neighbor’s fire, Inna decided to insure her apartment. She began to study the offers of various insurance companies on the Internet. But, unable to figure out how the options found to differ, I decided not to waste time and use the help of an insurance agent or broker. A friend told her that they help not only to choose a suitable offer but also immediately buy a policy. We understand how insurance agents differ from brokers and whether it is worth contacting them.
Who are Insurance intermediaries: ( insurance agents and brokers)
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These are Insurance intermediaries between insurance companies and their customers. They help people choose the right insurance program from one insurer or compare offers from several companies.
Intermediaries offer a wide range of policies: OSAGO, Casco , life insurance, property, and others.
Intermediaries are ready to come to you, inspect the property on the spot, if you want to insure it, and agree.
After the conclusion of the contract, it is sometimes possible to contact your intermediary, and not directly to the insurer. For example, when you need to consult, how to properly draw up an insured event, and what documents to collect in order to receive a payment.
Are insurance agents and brokers the same thing?
There are not many differences between them, but they still exist.
- Type of contract. Agents conclude with clients only an insurance contract on behalf of the insurer. And this agreement begins to operate from the moment you sign it and transfer the money for the policy to the agent. It is believed that the insurer received them, even if in reality the agent hands them over to the company’s office a few days later.
Brokers sometimes work according to the same scheme, but more often they act as an independent organization and offer you to additionally sign another contract – for the provision of insurance broker services. Conditions may vary.
For example, a broker undertakes to represent your interests and, on your behalf, agree with an insurer on exclusive terms. This option may be of interest to entrepreneurs.
In most cases, under an agreement with a broker, you transfer money to his account, and only then he transfers the required amount to the insurance company. And the policy begins to operate with a delay, which must also be specified in the terms of the contract. - Choice of insurance programs. Brokers usually work with several insurers. Sometimes agents represent only one company, and in some cases, they offer products from several insurance organizations—for example, an agent may represent different companies for different types of policies.
It happens that the agent of the insurer is a bank, car dealership, or other organization. They can have agency agreements with many insurance companies at once. - Service cost. Agents do not charge people for their mediation: they are paid by the insurance company.
Brokers themselves have the right to decide from whom to take a commission for their services – from the buyer or from the insurer whose policy they sold. But the broker is obliged to warn who exactly will pay this remuneration.
In cases where the broker is paid by an insurance company, there is a risk that he will offer the client insurance, which will bring him a large commission. And not the one that is most beneficial for the buyer. So always ask the reseller to pick up several options to compare them.
Insurance brokers usually conduct a comprehensive study of the insurance market, select the optimal insurance program and help collect the necessary documents. - Reliability and safety. Agents are official representatives of insurance companies. Insurers control the work of their agents, and make sure that they correctly calculate the prices of policies and draw up documents.
There is no unified register of insurance agents. But on the website of the insurance company you can find a list of its representatives, and even better, contact the insurer and make sure that the contract of the selected agent is valid. - The work of insurance brokers is monitored not only by the insurers with whom they cooperate but also by the Bank of Russia. The regulator maintains a special register, which lists all legal insurance brokers. Before buying a policy, you need to check if the selected broker is in this registry.
In practice, you may not notice the differences in the work of agents and brokers.
In what cases is it better to contact the insurer directly, and when – to an agent or broker?
If you know what insurance product you need and from which insurer, you can do without intermediaries.
Some policies are easy to issue without leaving home – on the website of an insurance company or intermediary. For example, an online agent can be a partner bank of an insurance company or an online insurance store. Insurers sometimes hold special promotions for certain types of policies and give discounts to those who buy insurance online.
If you do not have the time or opportunity to visit the office of the insurer, and you cannot purchase a policy online, contact an insurance agent or broker. In some cases, you can’t do without them at all – for example, when you need to inspect the property before signing the contract.
Often, agents themselves find clients – in car dealerships, at visa centers, at exhibitions, and sales of country houses. But you can call the insurer’s office or leave a request on its website – and an agent will be sent to your home or office.
There are situations when it is easier to buy a policy through a broker. For example, you need expensive insurance, but do not have time to compare offers on the market yourself. Brokers closely follow the offers of insurance companies, study their statements in detail, and can recommend a policy of a reliable insurer that will suit you both in terms of price and terms of the contract. But it is important to find an intermediary you can trust.
What to look for when choosing a mediator?
If you decide to use the services of an insurance agent or broker, you need to check a few important points.
- Does he work legally?
The broker must have a license from the Bank, and the insurance agent must be listed in the list of intermediaries of the insurance company on its official website. Some insurers share information about their agents with the association they belong to. In such cases, a list of agents can be found on her website.
Often scammers pretend to be insurance intermediaries. They sell fake policies and take the insurance money for themselves. If an insured event occurs, buyers of fake policies will not receive any payments. And if the owners of fake OSAGO policies become the culprits of accidents, then they will have to compensate the victims from their own pockets.
- Is there a license from the insurance company whose policies are offered by the intermediary?
Before buying a policy, it is important to make sure that the insurance company with which the intermediary cooperates has a license from the Bank for the selected type of insurance.
There are also cases where the license is there, but it is limited or suspended. This means that the company is temporarily unable to sell policies of a certain type of insurance or is not entitled to enter into any new contracts at all. In any case, it is better to look for another insurer.
- Is the price of the policy adequate?
Intermediaries often try to lure customers with lucrative offers. They promise to give a discount on the policy, but it is important to understand – due to which the price is reduced.
Perhaps the intermediary is ready to make a discount at the expense of part of his remuneration. It should be borne in mind that the discount cannot be more than the commission that the insurance company pays to the agent or broker. The size of the commission can be found in the contract between the insurer and the intermediary.
But quite often, instead of the promised discount, intermediaries simply offer cheaper policies that cover less risk than you think. For example, you want to insure your cottage against fire, but the special price insurance will not cover the risk of fire due to damaged wiring.
Or you are offered a policy with a franchise – which means that you will have to cover part of the losses yourself. Let’s say you buy a travel policy with a conditional deductible of 100 euros. Then, when contacting a doctor in another country, you will have to pay a fee for medical services within 100 euros yourself. But if the illness is serious and the costs are higher, the insurance company will cover them.
Carefully study the terms of the contract and the rules of insurance. On the websites of many companies, some online calculators allow you to estimate the cost of insurance. Compare this price with the one offered to you by the intermediary. If the numbers differ, ask for an explanation why.
- Does the intermediary have the right to sign?
Some agents and brokers may sign contracts with clients on behalf of the company they are dealing with. Insurers themselves decide which intermediaries to give such powers, to and which not. It is better to find out in advance.
If the intermediary does not have the right to sign, then in any case you will have to go to the company’s office to draw up a policy. You will save time if you contact the insurer directly or find an intermediary with the right to sign.
If the intermediary does not have the authority to sign contracts, you should contact the insurer directly, find another agent or broker with the right to sign, or conclude the contract through an online intermediary.
Agents and brokers who sell insurance online can operate without signatory rights. They simply transfer your data to the information system of the insurance company, which generates a policy and sends it to you.
How not to run into scammers?
First of all, check the agent’s documents with the data about him on the website of the insurance company, and the broker with the data from the register of the Bank.
Try to collect as much information about the intermediary as possible. Do not hesitate to ask for his contract with the insurance company to accurately understand the scope of his powers and check their validity.
Ask your agent or broker for detailed information about the insurer and study this information carefully. It is worth comparing them with the data on the regulator’s website.
Check the documents that you are offered to sign. Unscrupulous intermediaries may indicate themselves as a beneficiary under your agreement. Therefore, carefully study the insurance rules, the list of insured events, the number of payments, the term of the cooling period, and the conditions for terminating the contract.
For more information about the risks that may arise already at the time of signing the documents, read the text ” What dangers can a contract hide “.
After purchasing the policy, make sure that you have a complete set of documents on hand: the insurance policy itself, the contract signed by both parties, as well as a receipt or check for payment of the insurance premium.
What to do if the insurance intermediary has violated your rights?
By law, agents and brokers are responsible for the safety of your data, documents, and money, and for the accuracy of information about insurance products.
When you are dissatisfied with an agent, it is worth reporting your claims to the insurance company with which he cooperates. Insurers are required to be responsible for the actions of their representatives.
If you think that an insurance broker has violated your rights, complain to the Bank. In case of serious violations, the regulator may revoke his license.
In addition, you can contact a financial ombudsman who helps people resolve money disputes with financial companies before going to court. For example, if the agent overestimated the cost of the policy, and the company refuses to compensate you for the difference.
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