Many people are not fully aware of the functions that an insurance broker carries out. Basically, he is a middleman between an individual who wants insurance cover for something and an insurance company which supplies that insurance. There is a myriad of different insurance companies offering a wide range of insurance policies at often vastly different prices, and the insurance broker’s job is to provide the client with all the information in order to arrive at an informed decision about the policy required.

Some people believe that an insurance broker works for an insurance company, but this is not the case. In fact, many insurance brokers are self-employed individuals, or work for a small brokerage with perhaps half a dozen staff. Either way, they are not employed by insurance companies. The only sort of interaction an insurance broker has with an insurance company is in the course of his work to find the right policy for each client. 

These days, of course, many people who need an insurance policy are persuaded to go online to one of the price comparison sites in order to find the product with the cheapest price. Naturally, everyone wants everything they buy at the lowest cost, and that is fair and reasonable. However, the problem with price comparison sites when it comes to insurance is that they cannot take into account all the differing circumstances of an individual. 

For example, we have all seen recently the dreadful flooding in the North of England. Now let us suppose that, when it has all dried up and been restored, and the riverbanks strengthened, and so on, that you decide to move to one of the towns involved. They are, after all, in some very pretty parts of the countryside, so why not? Now obviously you will require insurance for your new home and for your contents. So, let’s say you go off to a comparison site and find a really good deal that costs less than any of the others, so that is the one you buy. So far, so good.

But then global warming, or climate change, or whatever it is being called this week, steps in, and your new home gets flooded. What a disaster. Still, there’s one good thing when you have dried everything out, and that is that - thank heaven – you bought that insurance policy when you moved.

Only to discover that the policy that you bought online was from an insurance company that specifically ruled out flood damage in the village to which you just moved. Of course, you didn’t know that when you bought the policy, because it was way down on page seven of the small print. That doesn’t alter the fact that you are not covered. Tough.

Insurance companies can, and do, change their policies all the time. It is entirely up to you to see to it that you purchase a policy that is right for you and covers you for all your needs. Yet with all of the thousands of policies offered across the insurance spectrum, how can you possibly be sure? 

That is the job of an insurance broker: to look at the whole picture and marry you up with the policy that, first and foremost, covers all your needs, and second, is at the best price. The price is NOT the most important consideration, but the price comparison sites would have you believe that it is. That is why they are called price comparison sites. Sure, you can get the cheapest policy, but if it doesn’t cover you for the very thing which happens, it is just money down the drain. (In the case of flooding, literally).

Finding the right insurance is very complicated. Take shipping goods overseas, for instance, when you need transit insurance coverage. Do you need total loss only, named perils, all risk, open coverage, single coverage, warehouse to warehouse? And what about general average coverage? 

You can see how complicated insurance can be, and why there are even insurance brokers who specialise in certain fields.