Do Insurance Brokers Get Better Rates?
Published On: February 10, 2021
An insurance broker can save you a lot of time but can they save money for your business, compared to going directly to insurers?
The short answer is yes. Insurance brokers get better rates by leveraging industry expertise and insurer relationships to find the right policy with proper coverage at appropriate costs.
With access to multiple insurance carriers and policy packages, independent brokers can find value in the insurance market based on your company’s specific needs.
In this post, we explain how insurance brokers get better rates and how they can make your job easier.
How insurance brokers get better rates for your business
A good broker addresses your specific insurance and benefits needs at optimal costs by connecting you with the best insurance for each of your identified risks. This way, they are often able to get better rates on insurance policies for clients than individuals buying insurance directly from the company.
At a basic level, an insurance broker will compare the coverage of various insurers to get you rates specific to your needs. And they will save you time on administration and claims by managing your policy. But there are more ways that a broker can get better rates for your business:
1. Finding policies.
An independent broker is not obligated to sell insurance policies from any specific carrier. So, they can compare coverage packages from various insurers to get you the best rates available. Brokers will assess your business’s specific insurance needs to match you with policies from carriers best equipped to meet your needs at the right price.
After all, there are so many carriers, types of insurance, and complex policies for even a small, at home business to consider. The best mix of insurance may involve products from different companies. A broker will conduct that search for you, and can also combine different types of insurance and different carriers to reduce your premiums.
2. Making insurance decisions.
One of a broker’s main responsibilities is to work with clients to understand their needs before matching them with policies. With a broker or brokerage firm guiding you through insurance options, you can know exactly how much protection you need and what rates are available.
Having a broker to answer your questions is an easy way to make informed, fast decisions on insurance and benefits. They provide you with unbiased, cost effective policy recommendations tailored to your business. Then you can confidently buy coverage that gives you the best solution.
Not only does this expertise make an easy job of insurance procurement, it also helps you avoid unnecessary extra costs and coverage you do not need.
3. Negotiating with insurance carriers.
With “broker” in the title, you would be correct to assume insurance brokers also negotiate with carriers to get you the lowest prices on coverage. Acting on your behalf, they can leverage partnerships with insurers to negotiate better premiums or specific discounts.
Brokers’ licensing and expertise in risk assessment presents a lower risk to insurance companies, so they often discount the premiums for these representatives. In this way, a broker can access policies and rates that may not be available for those going directly to the carrier.
Brokers searching for better coverage and rates ongoing can also save you time and expenses long term. Your brokerage could help build loss-prevention programs and review your policy every year, remarketing your premium to get your business the best priced renewals.
Is it easy to work with an insurance broker?
Good Independent insurance brokers make it easy to understand your coverage needs and pick a carrier based on coverage types, deductibles, covered risks and prices that work best for your business.
For many reasons, it is easier to work with an insurance broker than finding and purchasing policies on your own.
After all, you are not paid to be an insurance expert, and sifting through dozens of policy plans can be stressful, at best. Brokers add value by assessing your needs based on all your operations and risks, and then finding insurance plans that fit your profile.
They guide you through the buying process with professional advice, listening carefully to your needs and asking questions that lead to intelligent choices. Importantly, a good broker also helps you by breaking down insurance options into terms and conditions you can understand.
From claims management to employee benefits education, a full-service broker will provide the knowledge and detail that lets you focus on running your business.
Smart businesses have good insurance and benefits. The best way to find good insurance and benefits is through a broker, consultant, or advisor who knows what you need and provides you with significant value. But, how do you know who to hire? With seemingly endless options, you feel under pressure to choose the right one. We believe that transparency, information, and choice leads to better hiring decisions.
It's why we created Mployer Advisor, a free broker marketplace that allows employers to compare brokers, consultants, and advisors in one place.
To get started, find brokers near you to get matched with a short-list of qualified brokers. Looking for more exclusive content? Check out what’s trending on the Mployer Advisor blog, or check out some more insurance broker content.