The term broker traditionally refers to an individual or entity that acts on behalf of a customer or client which is called the principle. The broker uses their knowledge and expertise to advise the client on certain decisions usually pertaining to purchasing and trading. The broker can either play an advisory role or might also have complete purchasing and decision making power to be able to act on behalf of the client or principle.
The most commonly found type of brokers are investment brokers and commodity brokers. People who desire to invest their money and trade in commodities seldom have the knowledge and time to control their investment portfolios closely so they employ brokers such as for instance these who’ve far more insight and expertise to do something on the behalf. You can find however many other kinds of brokers who provide people with their inputs of knowledge and expertise. Other types of brokers include business brokers, Forex brokers, property brokers, insurance brokers and many more.
The term insurance broker is however a really vague one. Before insurance brokers were exactly like some other broker, but focusing on insurance policies. Versicherungsmakler Kassel They’d act on behalf of the principal/individual who employed them to be able to investigate various insurance options from various insurance companies to be able to secure the best deals for the principle, along with help interpret certain formalities within insurance contracts. A pattern eventually developed in which insurance brokers did not necessarily lookout to discover the best interests of the principle and would favor certain insurance companies. In reality many insurance companies posed as brokers to be able to obtain the preference of deceived and uninformed individuals. As a result, the term insurance broker has resulted in one with a much broader meaning. Today an insurance broker is basically viewed as any person who acts as a real estate agent to insurance on behalf of the principle, irrespective of perhaps the agent is acting in the interest of the principle or in the interest of a certain insurance company.
In fact the term insurance broker is seldom used to make reference to a real estate agent who’s hired by individuals seeking the best insurance offers. Today it’s more accurately put on employees of insurance companies who represent the clients of the company. Insurance brokers still represent insured individuals, but rather they’re hired by the insurance company itself to take care of the claims, legalities and transactions involving the insured and the insurance company. Therefore most brokers represent only 1 insurance company and act in the interests of the insurance company which they represent. The broker essentially acts being an intermediary which communicates the interests of the insured to the insurance company, manages the procedures of coverage and ensures that the insurance contract is adhered to.
To conclude, the existence of an broker is very essential to the insurance company and the insured individual, as they insure that neither party breaches the insurance contract and make sure that procedures are followed. The insurance broker also makes it easier for insured individuals to communicate their interests to the company and successfully make claims should the requirement arise.