The term broker traditionally refers to a person or entity that acts on behalf of a buyer or client which is known as the principle. The broker uses their knowledge and expertise to advise the client on certain decisions usually regarding 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 absolute most commonly found kind of brokers are investment brokers and commodity brokers. Those who desire 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 have much more insight and expertise to act on the behalf. You will find however many other styles of brokers who also 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 very vague one. Before insurance brokers were exactly like every other broker, but specializing in insurance policies. They would 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 where insurance brokers didn’t necessarily lookout for the best interests of the principle and would favor certain insurance companies. Berufsunfähigkeit 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 basically regarded as any person who acts as a realtor to insurance on behalf of the principle, aside from if the agent is acting in the interest of the principle or in the interest of a particular insurance company.
In reality the term insurance broker is hardly ever used to make reference to a realtor who’s hired by individuals seeking the best insurance offers. Today it’s more accurately placed on employees of insurance companies who represent the clients of this 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 as 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.
In summary, the existence of an broker is quite necessary to both the insurance company and the insured individual, while they insure that neither party breaches the insurance contract and ensure that procedures are followed. The insurance broker also causes it to be easier for insured individuals to communicate their interests to the organization and successfully make claims should the requirement arise.