The word 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 could 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. Those who need to invest their money and trade in commodities seldom have the knowledge and time to manage their investment portfolios closely so they really employ brokers such as these who’ve much more insight and expertise to do something on the behalf. You can find however many other styles of brokers who also provide people with their inputs of knowledge and expertise. Other samples of brokers include business brokers, Forex brokers, real estate brokers, insurance brokers and many more.
The word insurance broker is however an extremely vague one. Previously insurance brokers were the same as any broker, but devoted to insurance policies. 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 very best deals for the principle, as well as help interpret certain formalities within insurance contracts. A pattern eventually developed by which insurance brokers didn’t necessarily lookout to discover the best interests of the principle and would favor certain insurance companies. Altersvorsorge Kassel In fact 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 developed into one with a much broader meaning. Today an insurance broker is essentially viewed as any individual who acts as a real estate agent to insurance on behalf of the principle, regardless of whether the agent is acting in the interest of the principle or in the interest of a specific insurance company.
In fact the term insurance broker is rarely used to refer to a real estate agent who is hired by individuals seeking the very best insurance offers. Today it is more accurately placed 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 handle the claims, legalities and transactions between the insured and the insurance company. Therefore most brokers represent only one insurance company and act in the interests of the insurance company that 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 required to the insurance company and the insured individual, as they insure that neither party breaches the insurance contract and be sure that procedures are followed. The insurance broker also helps it be easier for insured individuals to communicate their interests to the business and successfully make claims should the requirement arise.