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To broker or not to broker, the first question when buying insurance

October 30, 2015

To broker or not to broker, the first question when buying insurance.


President, Health Insurance Specialists, Inc.

All businesses, restaurants being no exception, want the best product at the best price. This is especially true with insurance, whether it is protection for the business/business owner, or protection for the employees through a variety of employee benefit programs. It is this author’s experience, with no exceptions, that the optimum approach is to use a reputable broker. Here is why in a Q&A format.

Q-We have capable internal people handling this; why do we still need a broker?

1-A professional, addressing similar insurance needs for many companies every month of the year, can leverage their experience and relationships to gain better results than your efforts once per year. If not, you did not pick the correct broker.

Q-Why do we need someone external to shop our coverage?

2-A quality broker will do the legwork to find the best solution for the matter at hand. These can often be something that outsiders to the insurance industry will never be aware of or able to contract with directly. It may not even be new, perhaps it’s just a design that outsiders will not be aware is even an option.

Q-Will a broker really get better results or better service than we can obtain without a middleman?

3-Business is best built on relationships. Just as restaurants seek loyal return customers and focus their marketing toward that end, so do insurance carriers focus their energy on production aggregators (read: brokers with many clients as opposed to the single client acting directly). To put it another way, you would expect to get better pricing/service/responsiveness from your car dealer if you bought a fleet of 50 cars from them as opposed to buying one car from them.

Q-Is there an advantage to using multiple brokers for our various insurance needs?

4-Bundling your business with one broker (both business insurance and employee benefits) can result in both hard and soft cost savings. By making the relationship more profitable for the broker they should price their compensation based on the relationship and not full freight for every product and service. In addition, your internal people will have an easier time because they will have one point of contact for all insurance matters that knows what your needs are.

Q-If State/Federal exchanges and marketplaces are the future of healthcare, why would we still benefit from a broker?

5-A broker works for you and represents your interests. They are employed by you, not the carriers or exchanges. Whether you seek federal subsidy for premium expense on the exchange or buy outside the exchange, a broker can still represent you and add value.

We could go on and on but think of it this way. You wouldn’t go to an IRS audit without a CPA, you wouldn’t go to court without your lawyer, so why would it make sense to evaluate/negotiate/contract/deal directly with a billion dollar insurance carrier whose interests are very often served by finding a way NOT to pay your claim? Further, unlike a lawyer or CPA, a broker is paid by the insurance carrier, not you. Someone is going to be compensated for the sale of your health insurance; it might as well be a broker who is your advocate and ally, and should be viewed as an indispensable member of your team.  It doesn’t cost you an additional penny for this expertise.

The author, Jon Belinkie,  can be reached at:

Health Insurance Specialists, Inc.  “For all your insurance and financial service needs”
17620-B Redland Road
Rockville, MD. 20855
p-301-590-0006   f-301590-0661