Insurance Brokers: Questions to Ask while searching

But you need to be sure that the insurance broker is reputable. Check out their website and see what else they do. Often insurance brokers will also be mortgage brokers, and they may be well known. If a friend or associate has good results with an insurance broker, then they may be worth trying. Word of mouth is often a good way of finding good professionals in the finance industry.

Talk to the broker and see if they have good understanding of your insurance needs. If they have more questions than answers, maybe they are not the right broker for you. They should be able to provide you with information on insurance products from a range of financial institutions. If your broker is hard to get hold of, does not return your phone calls in reasonable time, or is vague or confusing, you are probably better off looking for another broker.

There are some important things to check about any broker. They should be a member of the National Insurance Brokers Association (NIBA) which has a very strict code of conduct. All brokers are required by law to obtain a license from ASIC. They are subject to ASIC laws, and must fulfill all stipulations of their licence. Brokers are expected to be educated to high levels regarding finance and the law as required by ASIC. NIBA members must have higher qualifications than the legislated ASIC minimum.

All insurance brokers must be participants in a consumer complaints handling scheme as approved by the Government. NIBA brokers must ensure that they comply with the Insurance Brokers Code of Practice, , including clear and prompt communication with the client, proper representation when arranging policies and providing support in the event of a claim. A new revised Code of Practice comes into effect on 1 January 2007.

Choosing a NIBA broker can give you peace of mind and save you time and effort in searching for a good broker. NIBA member companies are required to hire Qualified Practising Insurance Brokers (QPIBs) who must undertake continuing professional education, which enables them to be fully conversant with current industry trends and changes, so they can provide you with the most accurate and effective advice.

NIBA brokers deal with many different insurance providers, and therefore a wide range of insurance products, and sometimes other underwriters as well. They are aware of the benefits, costs and exclusions of competing policies on the market, and may save you money by finding you the best deal. A broker will explain your policy and any relevant special situations that may apply, and advise you of any fees they charge for any services they provide to you.

For any disputes relating to the performance of your broker, contact the Insurance Brokers Disputes Limited.

You can find out more information on insurance brokers at http://www.asic.gov.au/asic/asic.nsf and http://www.niba.com.au/html/.

Summary

When looking for an insurance broker:

• Use word of mouth to find a good broker.
• Check that they are licensed by ASIC.
• Check they are members of NIBA.
• Ask any broker a lot of questions regarding insurance products.
• Avoid brokers who give vague or confusing advice, or do not provide you with a large range of insurance products.

Article correct at its author date: Dec 2006. Copyright Virtual Office Space, Any unauthorised reproduction of this article will be prosecuted to the full extent of the law. Credit Cards Australia.

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