What is a Homeowners Insurance Broker

What is a Homeowners Insurance Broker?

Wind, hail and water might sound like a disco band from the 70s, but these three elements can be deadly to your house. About one in twenty homeowners file a claim every year — most often for damages from one of these three elements. On the other hand, fire and lightning strike less often, but they cause even more damage.

Even though no one enjoys shopping for insurance, a homeowner’s policy is your best defense. If your eyes glaze over when you have to ponder coverage, deductibles, exclusions and riders, an insurance broker will do the research for you and guide you through your options.

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    What is an insurance broker?

    An insurance broker is a professional who specializes in helping people and businesses buy the policies they need. Brokers may specialize in a particular type of insurance, like health insurance, or a specific industry, like food service. However, some brokers are generalists who write a wide range of policy types for both individuals and businesses.

    Insurance brokers are regulated by state law and may be required to have a license and pass a professional exam, depending on which state they are operating in. Most states also require continuing education credits.

    The broker is paid a commission by the insurance companies, so their service is free to their customers.

    Insurance broker vs. insurance agent

    In a nutshell, an agent works for one insurance company, while a broker is an independent professional who can write policies from several different companies.

    If you know that you want to buy a particular type of policy from a specific company, you would go to an agent of that company to buy the insurance. Most people have bought auto or home insurance this way, so you may be familiar with this kind of insurance transaction.

    A broker can give you guidance and advice about what kind of insurance suits your situation and compare quotes and coverage from different companies. Businesses usually work with a broker to look at health insurance coverage for their employees because they want to look at options from multiple insurers and compare all the complex choices and coverages.

    The benefits of using an insurance broker

    A broker is a knowledgeable advisor who can help you understand your liability risks and manage them through insurance. Your broker can help you understand what’s covered, what’s excluded, and the differences between policies from different companies. Some brokers can sometimes help clients negotiate lower rates — especially if the client is a large company or group.

    Why would you choose an insurance broker vs. an agent? Since agents work for a single company, they have a limited number of policies available to meet your needs. However, a broker can choose from a wider variety of policies from different providers, so they can do a better job finding a policy that fits the client’s needs and budget.

    Like an agent, the broker’s service continues beyond the sale. Your broker will give you advice when you need to file a claim and assist you with any changes in your insurance needs.

    Companies that need complex coverage for workmen’s compensation, liability, errors and omissions, property, disability, and employee health use brokers. For individuals, a broker isn’t necessary — but some people prefer to work with a broker to buy their home, auto, life, disability, and other coverage.

    Should I use an insurance broker for home insurance?

    What is a home insurance broker? This niche insurance professional is a specialist in homeowner’s policies and could be very helpful to you if your situation is complicated or if your time is very limited.

    Shopping online for your own homeowner’s policy isn’t difficult — but it can be time-consuming.

    A broker will do the work for you — and you don’t have to pay for the service. Brokers receive a commission from the insurance company for the policies they sell. They’re bound to a fiduciary responsibility, which means if they prioritize their own commission above their clients’ best interest, they can be sued and lose their license.

    Some special cases where a broker can be especially useful include:

    • Low-value property.
    • High-value property.
    • Mobile and prefabricated homes.
    • Multi-family homes.
    • Home-based business.
    • Homeowners who’ve been denied insurance.

    Like most things in life, working with a broker has positive and negative aspects:

    Pros

    • Gathers quotes for you
    • Understands coverages and liabilities
    • Can save you money

    Cons

    • Broker may try to sell you other policies
    • Not necessary for most people

    Getting a home insurance quote online

    Some people prefer not to work with a broker or local agent. Buying insurance directly can be cheaper, and it’s not difficult. If you’re looking for a straightforward homeowner’s policy, it’s easy to get online home insurance quotes online.

    Here’s how to an online quote:

    1. Start with our list of the best home insurance companies to find the one that fits your needs.
    2. Read reviews at the Better Business Bureau or Yelp.
    3. Visit the website of the company you’re interested in and look for the “apply” or “get a quote” button.
    4. Fill out the required information about yourself and your home.
    5. Compare quotes from two or three different companies before you commit.

    You’ll receive quotes very quickly. Some companies give automated quotes almost instantly; others will have someone call you within a day or two.
    Then all you have to do is compare the coverage and prices and choose the policy you want.

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