What is an insurance broker?

Kirsty France
Personal Finance and Healthcare Expert
Kirsty is a personal finance and healthcare expert who enjoys demystifying legal and insurance topics for a wider audience. She’s a former solicitor with a personal injury and insurance background.
Kirsty France
Reviewed by
Chris Steele
Founder and Editor
Cert CII (F1, IF7 & I10)
Chris is our resident private health insurance and healthcare expert. He has over a decade of experience writing about private medical insurance and treatment. He's Chartered Insurance Institute qualified and is regularly quoted by the national press.
Chris Steele
Reviewed by
Updated on
Jun 5, 2024

If you're looking for insurance, you might think it's best to research and approach insurance companies directly. However, an insurance broker can provide valuable advice tailored to your circumstances. So, what is an insurance broker, and how can they help?

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Here's what you need to know about insurance brokers in a nutshell:

An insurance broker is a financial adviser who helps clients find the right insurance for their needs. The Financial Conduct Authority regulates insurance brokers to ensure they offer honest and fair advice and act in their client's best interests.

Some insurance brokers work with many different types of insurance, while others are more specialised. A specialist broker might focus on business insurance or life and health insurance. Working with a specialist insurance broker can ensure you get the best insurance policy for your needs, as they'll likely have more in-depth knowledge of the insurance market.

How do insurance brokers work?

Insurance brokers represent insurance companies and provide expert advice to help you choose the best insurance policies for your needs. When you contact an insurance broker, you can expect an initial consultation, during which they'll ask questions to understand your circumstances. The information they'll request often depends on the type of insurance you need. For example, if you want health insurance, your medical history may be relevant. If you're looking for income protection or life insurance, they may want to know when you intend to retire.

After your initial conversation, your insurance broker will look for suitable policies and contact you when they've received quotes from multiple insurance companies. They'll help you understand the details of each policy, including the insurance coverage, underwriting, and costs, so that you can make an informed choice. They should also help you understand the insurance provider's technical terms and offer expert guidance.

When you choose a policy, your insurance broker can set everything up for you.

How do insurance brokers get paid?

Insurance brokers are typically paid on commission. When you choose an insurance policy, the insurance company pays the broker a commission based on a percentage of the premiums you'll pay, meaning working with a broker won't cost you extra.

Although your chosen insurance company will pay the broker when they introduce you as a customer, it's vital to remember that insurance brokers represent your interests. They're regulated, so you're protected if a broker recommends an unsuitable policy because of a relationship with an insurance company or higher commissions.

What's the difference between an insurance broker and an insurance agent?

Insurance agents only offer advice on insurance products from one insurer. You may already know you want to take out a policy with a particular insurance company because its values align with yours or you like its benefits. An insurance agent represents that company and can provide guidance on the right policy for your needs. However, you must remember that insurance agents represent the company's interests rather than yours. Insurance agents won't tell you if there may be a better policy for you with another provider.

By contrast, an insurance broker can advise you on policies from many insurance companies rather than just one. Insurance brokers must offer impartial advice on the best policy. If you want to ensure you've explored all your options, you may be better off with a broker rather than an insurance agent.

Can I use comparison sites instead of an insurance broker?

A comparison site can be helpful if you know what you want your insurance to provide. For example, your car insurance quote may have increased on renewal, and you want to find a better price.

A comparison site offers fairly general insurance information, so you must be confident when comparing your existing quote with any new ones you obtain. In some cases, this is straightforward. However, many insurance products have complex terms and conditions and use technical terms that an expert broker can help you understand.

What are the benefits of using an insurance broker?

When purchasing insurance, you might be tempted to cut out the intermediary and go straight to insurance companies. Here are some of the benefits of working with an insurance broker.

1. Whole of market advice

As mentioned, an insurance broker represents more than one insurer and can help you compare providers across the insurance industry. This is known as 'whole-of-market advice'. One of the most significant benefits is that they may be able to introduce you to a provider you've never heard of before but that perfectly meets your insurance needs.

Specialist brokers have in-depth knowledge of insurance companies in their field, and what insurance cover each provider offers, but unlike insurance agents, they aren't tied to one company.

2. Tailored advice

When looking for insurance, you might ask your friends or relatives for recommendations. However, one insurance company might provide coverage that's ideal for them but may not be the best choice for you. Insurance brokers take the time to understand your needs and circumstances to find the best deal.

For example, your lifestyle can be crucial in choosing the best health or life insurance. Insurers have different risk management strategies that influence how they calculate premiums and how your personal circumstances affect your insurance cover and cost. A broker can guide you through your options and advise you when comparing quotes so you understand the pros and cons of each policy.

3. A broker can save you time

You can contact insurers separately for quotes. However, this can take time. You must provide the same information several times. Many insurers will provide quotes quickly, but you may have to chase others for a response. Others might come back with queries for additional information. Finally, you must spend time comparing quotes before choosing a policy.

Insurance brokers will ask you for information in a single conversation and then contact insurance companies for you. They'll do all the chasing and only contact you for more information when necessary. They can also summarise each quote so you'll understand the small print without spending hours deciphering technical insurance terms.

4. You could save money

Insurance brokers are paid on commission, so you won't have to pay extra when buying insurance through a broker. A broker can ensure you get the best deal for your budget in terms of cover and premiums. They can also advise on whether your policy remains the best choice when you receive a renewal quote.

Specialist brokers form relationships with insurers while still acting in your best interests. This can give them access to deals that aren't available to the general public, such as lower premiums or more cover for your money, so you get a better deal.

5. Help with claims

Most insurers offer a straightforward claims process. For example, many health insurers let you claim over the phone, online or via an app. In most cases, this is the best way to start a claim. However, your claim may be more complex in some circumstances, meaning the claims process will be too.

Some insurance brokers support their clients with complex claims, while others don't, so it's worth asking if this is important to you.

If you want to claim but need to know whether you have the right coverage, your broker can often tell you. You won't need to contact your insurers and potentially have your claim turned down, as rejected claims can increase your premium in the future.

An illustration of two individuals engaged in conversation. The text overlay reads: "Four things to think about when choosing an insurance broker: Is the company authorised and regulated by the FCA? How much experience does your adviser have? Do you feel comfortable talking to them? What are their clients saying?"

What to look for in an insurance broker

Finding the right insurance broker can feel challenging. A good insurance broker acts for you, so working with someone you trust is essential. Here are a few things to think about when selecting your broker.

Are they regulated?

The FCA regulates insurance brokers, and brokers appear on the Financial Services Register, which you can check free of charge. The register will also show whether they're authorised to advise you about insurance. Other trade associations, such as the British Insurance Brokers' Association, can help you find a broker, but membership is optional.

The register will also tell you whether someone is a broker or an insurance agent.

When you choose a regulated broker, you're protected by the Financial Services Compensation Scheme and the Financial Ombudsman Scheme, meaning you can seek compensation if something goes wrong.

Are they a specialist broker or a general one?

A general insurance broker can advise on a wide range of insurance plans. They can be a great choice if you need several different policies, such as car insurance, health cover, and travel insurance. However, if you need one type of cover, a broker specialising in that field may be a better choice.

They'll likely have a deeper knowledge of the insurance available, so they can guide you to the best deal and provider for your needs.

How much experience do they have?

Every insurance broker must start somewhere, but more experienced brokers will have had time to develop their skills and industry knowledge. They'll also have gained experience working with different types of clients and determining which policies best suit their needs.

They may ask you about your current circumstances and plans to ensure you have a policy that can grow with you over time. This reduces the risk of switching providers in the future, which can be complex.

Do you feel comfortable talking to them?

A good insurance broker will cut through the jargon and help you find the best insurance coverage. If you feel as if they're blinding you with science or that you can't speak openly about your circumstances and needs, they likely aren't the right brokers for you.

Being able to talk to your brokers and ask questions without feeling intimidated is essential.

What do their clients say?

You may have started your search for a broker by asking for recommendations. However, to compare potential brokers, it's a good idea to look at their reviews to see what other customers say. Third-party review sites such as Trustpilot and Feefo host independent reviews, and you can search for brokers by name. Brokers may also host reviews on their websites; however, they may cherry-pick the more favourable ones. It's generally a good sign if a broker provides a link to third-party sites on their website.

Getting professional advice

MyTribe guides help you learn more about insurance and make an informed choice. However, as our guide explains, speaking with a broker can help you get the best insurance for your needs. Contact us for a comparison quote, and we'll connect you with a high-quality, regulated broker for tailored advice.

Disclaimer: This information is general and what is best for you will depend on your personal circumstances. Please speak with a financial adviser or do your own research before making a decision.

This article was written by:
Kirsty France
Personal Finance and Healthcare Expert

Kirsty is a personal finance and healthcare expert who enjoys demystifying legal and insurance topics for a wider audience. She’s a former solicitor with a personal injury and insurance background.

Article reviewed by
Chris Steele
07 May 2024

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