What is the function of an insurance broker?

An insurance broker serves the essential function of representing the interests of the insured in negotiations with insurance companies. This role involves assessing the insurance needs of clients, advising them on suitable coverage options, and facilitating the process of obtaining insurance policies that best meet their requirements. Unlike agents, who may work on behalf of a specific insurance company, brokers operate independently and are typically able to compare various insurance products from different providers to find the most advantageous terms and coverage for their clients.

This advocacy role is crucial, as it ensures that the insured is not just passively purchasing insurance but actively engaging in a process aimed at securing the most appropriate and effective coverage based on their unique circumstances. Brokers leverage their market knowledge and negotiation skills to ensure clients receive favorable terms, pricing, and conditions in their insurance policies, which enhances protection for the insured in various situations.

In contrast, managing claims or handling disputes is typically considered a separate function often performed by claims adjusters or other specialists within insurance companies. Promoting exclusively one company's products or underwriting applications would compromise the broker's independent advisory role, which is fundamentally about finding the best options for the client rather than following the interests of a specific insurer.