What Does an Insurance Broker Do?

An insurance broker works on your side of the table: they look at what you need to protect, compare coverage from several insurance companies, and explain the differences before you decide. The policy itself is issued by an insurance company; the broker helps you find and understand the right one.

The short version

• You describe your situation once. Your car, your home, your business — the broker gathers the details the insurance companies need.
• The broker asks several companies. Instead of one company's offer, you see options side by side.
• You get an explanation, not just a price. What is covered, what is excluded, what deductible you are agreeing to, and where two quotes that look alike actually differ.
• The broker stays with you. Changes during the year, renewals and questions after a loss go through the same person.

Broker, independent agent, captive agent

The words are used loosely, and their exact legal meaning differs from state to state. In everyday use:

• A captive agent represents one insurance company and offers that company's policies.
• An independent agent or broker works with several insurance companies and can place your coverage with whichever one fits.

The practical question is simple: can this person show me more than one company's option? With an independent broker the answer is yes.

What a broker actually does for you

1. Works out what needs protecting

A good conversation comes before any quote. For a family that means the cars, the home or apartment, valuables, and how much liability protection makes sense. For a business it means the property, the operations, the employees and the contracts that require proof of insurance.

2. Compares policies, not just prices

Two quotes can differ in ways the price does not show: a lower limit, a higher deductible, an exclusion that matters for you. A broker reads those differences and tells you about them in plain language.

3. Handles the paperwork

Applications, the documents a lender or landlord asks for, certificates of insurance for a client — the broker prepares them and keeps track of renewals.

4. Helps when something happens

The claim itself is handled by the insurance company, but your broker can help you report it, understand what the policy says and know what to expect next.

When working with a broker helps most

• You own more than one thing to insure — a car and a condo, a home and a rental property, a business and its vehicles.
• Your situation is not standard — a new business, a home in an area insurers are cautious about, a past claim.
• You want to understand the policy rather than click through it.
• You already have insurance and want someone to check whether it still fits and what a switch would involve.

How brokers are paid

Brokers are usually paid a commission by the insurance company that issues the policy. In some situations a broker may also charge a fee where it is allowed; any fee should be explained to you up front. It is always fine to ask your broker how they are paid.

Working with GMI

GMI Brokerage Corp. is a licensed independent insurance agency with offices in Brooklyn, New York and Sunny Isles Beach, Florida. Our agents compare options from several carriers for personal insurance — auto, homeowners, condo, renters and umbrella — and for business insurance. Get in touch and a licensed agent will walk you through your options.