We have all been there at one point in time or another- whether its standing at the kiosk at the local bank, booking a vacation through a travel agent, or listening to a salesman talk about a product. We listen to this person talk, and we wonder whether what they are saying is actually valuable, or if it’s just the next sales pitch for them to make a quick buck.
Insurance is no exception
I can’t tell you how many times I get that same glazed over look from a client during a meeting when I go through their coverage with them- making them aware of what is covered, and more importantly, what is not covered under their policy. I can tell that there is boredom settling in, a lack of interest to actually dive in, and the ultimate question of “what is this going to cost”?
So let’s clear the air on a few reasons why insurance brokers simply wont “shut-up” in these meetings, and why we ramble on the way we do. There are a number of reasons we feel compelled to talk about coverage, and it goes way deeper than the price tag that is paid at the end of the visit.
1. Insurance coverage has limitations
There is this phrase that is thrown around the insurance world that can be very misleading, and that phrase is “all risk coverage”. While the intent is to cover physical property for all types of direct physical losses, there are always exclusions involved. We as brokers know what these things are, and we want to share that knowledge with our clients, so that there are no disappointments when it comes to claim time.
2. We are educated
Brokers all over the province are required to go through a rigorous licensing process that include minimum education hour requirements, courses, modules, training, seminars, and more. Once a broker completes all these requirements, they must submit an application for a license through the Insurance Councils who regulate licensees and brokerages alike and they put the final stamp of approval on a broker’s ability to transact insurance business in accordance to the bylaws that govern our industry. Further to all of that, a broker is required to complete a minimum of 8 hours of continuing education per year to ensure they are keeping up their knowledge of their products and what they cover.
3. We are regulated
This was briefly touched on in the previous point, but I wanted to dig a little deeper in to the regulatory requirements of insurance brokers across the country. There are many requirements that must be followed to have a license- both for the brokerage business to operate, as well as the broker individually to conduct business. Some of the requirements for licensing are as follows:
- Errors and Omissions insurance. This protects the broker for claims that arise out of an error made by the broker. Brokers everywhere are required to carry this coverage as a fail safe when an error has been made
- Sponsorship. A brokerage must be sponsored by an insurance company in order to operate. Further, individual brokers must be sponsored by a brokerage in order to get licensed. This ensures accountability as there is a chain of representation leading back to the insurance company that the brokers are dealing with
- Bylaws. Brokers adhere to a code of conduct that are written into the bylaws of our councils. The insurance councils regulate the industry through these bylaws, and investigate conduct complaints when one is made.
4. We have experience
One of the main educators in the insurance industry is experience. We as brokers and insurance professionals see when things go right with a claim, and when they don’t. We see when coverage works well, and when there are gaps that fall short. We are in contact with the insurance companies, and they bring tangible examples time and time again of the infinite situations that arise that call for action in the insurance world. There are many times where a broker will have example after example of claims that went well and why, and they will also have a few examples on why a claim went bad. Experience is one of the best educators, and when a broker works in the industry for a substantial period of time, that experience becomes invaluable to the consumer.
Insurance is boring, its technical and wordy, and yet it’s necessary. We as brokers get the challenges of going through the paperwork and knowing the contracts, and for that reason we caution our clients about coverage and protection. The talks brokers have with their clients are not ones of sales pitches and cash grabs. The talks we have with them are from a perspective of education, experience, and knowing what will lead to a satisfying claim experience, and one that falls short.