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How to Save Money by Hiring an Insurance Broker

The Krazy Coupon Lady reports:

“Recently faced with purchasing new insurance as I moved out of state, a friend suggested an insurance broker in my new city. Insurance broker?

I thought…”Why wouldn’t I just call a company directly?” But after learning how much money this broker saved my friend, I thought this alternative approach was worth researching. I learned that an insurance agent tries to fit me into the one product their company sells, while an insurance broker finds the best product that fits around my specific needs and budget. With this knowledge, I said goodbye to the archaic mindset of buying insurance solely from one company and being bound to their pricing and policies.

Whether searching for medical, car or life insurance, here are a few benefits to working with an insurance broker:

Time is money

Life is hectic! I did not have insurance and I also didn’t have time to call 10 different insurance companies, repeat all of my personal information to each one and then wait to hear back regarding quotes. After providing my information only one time, the insurance broker I used combed the market for me, comparing a variety of plans, policies and coverage for my needs.

Benefit from broker knowledge

It would take most of my free time to become aware of and understand every change that happens in the insurance industry. Thanks to my broker, I can spend my time the way I want. Brokers continuously educate themselves on their industry. They also have connections to numerous insurance products that the average person may not know exist or cannot access on their own.

Gain knowledge

Understanding what insurance is, how it works and learning the industry’s terminology can save money. Establishing a relationship with a broker who took the time to explain each of these things to me was an eye-opener. Instead of walking away confused or wondering if I had enough coverage, I felt confident the best policy was chosen from the options that were available. Knowledge is power; studies show people who purchase too much coverage often let the coverage lapse after just a few months, leaving them unprotected. The most common factor in purchasing too much coverage was a lack of understanding about the policy.

Reap the savings

Let’s talk about actual savings. Here is an example of an actual savings amount for a personal health insurance policy: A six-month health insurance premium was $2,440 at a well-known company. After getting several policy quotes from my broker (offering the same type of coverage) the best rate for the same product was $1,905, a savings of $535. I don’t know about you, but saving an extra $1,070 per year sounds good to me!

Insurance brokers and captive agents (those working for one specific company) are paid the same way. The difference is a captive agent needs to present the one product they have, whereas a broker quotes numerous products from several companies, with varying rates. While using a broker will not be everyone’s preference, trying one the next time an insurance need arises doesn’t hurt.

I would recommend a visit to the National Association of Health Underwriters website for those searching for health insurance. For other types of insurance, perform a Google search for “independent insurance broker” followed by a specific city name to generate brokers in a particular area. The Insurance Information Institute’s website is also a great resource to learn more about insurance in general.”

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