- • How Insurance Works
- • A Regulated Industry
- • What is Risk?
- • Types Of Insurance
- • Choosing an insurer
- • Finding an insurer
- • Insurance Brokers
- • Product Disclosure
- • Common Exclusions
- • Making a claim
- • Disputes
- • Code of Practice
- • Catastrophe Arrangements
- • Insurance Fraud
- • Calculators
- • Consumer Tips
- • Useful Links
- • Useful Contacts
What is an insurance broker?
Insurance brokers are professional advisers who work on behalf of their clients. They help individuals and businesses identify their risks and decide what needs insuring and what can be managed in other ways. An insurance broker may specialise in one specific type of insurance or deal with many different types.
Insurance brokers provide their clients with expert advice in relation to the risks associated with the property they own and/or the business they operate. Often an insurance broker can provide professional, technical advice which can be particularly useful in the event of claim.
Brokers have access to many different insurance policies and will be aware of the benefits, exclusions and costs of competing policies. Brokers also help arrange and place the cover with the chosen insurer and can often provide advice on how to make the most of your insurance budget.
Why use a broker?
Insurance brokers have access to many different insurance policies because they deal with a range of insurance companies directly. Brokers will be aware of the benefits, exclusions and costs of competing policies. An insurance broker can also help arrange and place the cover with the chosen insurer and can often provide advice on how to make the most of your insurance budget.
When arranging insurance, many people take shortcuts without seeking proper advice, understanding the fine print or considering whether they are getting value for money. An insurance broker can help you determine the level of cover that is required so you can ensure you are properly protected.
Brokers are available to assist individuals and businesses perform specialised work to design a customised insurance and risk management program. They design the policies, negotiate the terms with insurance companies and place the cover with the insurer. Risk management programs are often integral to the process. Risk prevention and loss minimisation strategies serve towards reducing premium costs.
Insurance brokers have knowledge of the insurance market and the ability to negotiate competitive premiums on your behalf. A broker will also explain your policy and advise you of any special situations that you need to be aware of. Furthermore, a broker is obliged to advise you of the fees charged for services provided to you.
How to select a broker
The National Insurance Broking Association (NIBA) is the peak broking body that represents the interests of members working on behalf of their clients to governments, regulators, media, consumer groups and the wider community. NIBA offers a service to help Business and Consumers find a Broker they can trust. To find a Broker in your local area, conduct a location search on your postcode.
Visit the NIBA find a broker website for more information on how to select and insurance broker and what you should consider.
How is the industry regulated?
All insurance brokerages in Australia have an Australian Financial Services (AFS) licence and must meet the conduct standards within the Financial Services Reform Act (part of the Corporations Act). The Australian Securities and Investments Commission (ASIC) is the industry regulator that monitors the conduct of the licensees. Brokers must also subscribe to and be bound by the decisions of the Financial Ombudsman Service (FOS) a service designed to resolve complaints and problems between clients and their brokers.
Reputable and experienced insurance brokers in Australia will generally also hold additional qualifications such as a certificate or diploma in financial services.
In 2006 the National Insurance Brokers Association (NIBA) introduced the Insurance Brokers Code of Practice(Code) as part of a national self-regulatory scheme which is intended to promote good relations between insurance brokers, policyholders and others in the insurance industry, as well as efficiency in transactions by laying out standards of good practice and levels of service that are expected of brokers. Members of the National Insurance Brokers Association of Australia (NIBA) are bound by the terms of the Code. Other parties or entities can also adopt the Code by entering into a Deed of Adoption with NIBA. A copy of the Code may be viewed here - Insurance Brokers Code of Practice.