THE ROLE OF CAR INSURANCE BROKERS

Rozer Andy May 27, 2017 Comments Off on THE ROLE OF CAR INSURANCE BROKERS
THE ROLE OF CAR INSURANCE BROKERS

The responsibility of a car insurance broker is to perform an intermediary role between the underwriting insurance company and the customer. To perform this role, there are different functions which they perform while interacting with the customers and the Insurer.

When Sudbury Insurance Brokers places motor and car insurance risks on cover, there activities are quite different from other kinds of insurance because the risk has a smaller spread.

When any member of the public visits a motor insurance broker, they anticipate that the broker is aware of all the available covers and offers in a conventional commercial motor policy and car insurance policy. A broker needs to also be aware of the disparities in prices and policies offered by different underwriters and Insurance companies which does business with the broker.

The duty of Car insurance in Sudbury Ontario is not limited to the purchasing and supply of insurance. They are also expected to be available to perform as intermediaries to the insurer at all times, act on behalf of clients in the event of a change of policy within the contract period or to handle any claims which needs to be made.

The two main areas of insurance handled by car insurance brokers are the commercial fleet motor policy and the private individual’s motor policy.In recent years, a trend in the large broking house has been to focus more attention on the commercial motor insurance fleet while giving less attention to the market private sector.

Many big international brokers consider the private motor insurance as not economical for a completely sustainable business, hence large regional and provincial brokers or specialist sub-brokers deal more with a large proportion of this category of motor business.

Auto insurance brokers get commissions for their job as intermediaries which are received from the insurance firms where the business is placed. The available commissions in the motor market differs slightly and the current soft market where commissions and premiums are low, have helped the high street insurance broker to search for more profitable business in insurance cover different from Motor commissions for an auto insurance policy which may vary from 7.5% to 20% although with large fleet business and commercial vehicle contracts. Brokerage may be accepted on the basis of fee which is usually charged over the entire portfolio for that client.

Before now a tariff or standard rate which was reviewed and agreed was used in the Canadian car insurance market. This no longer holds water, but still influences some under writers in some specialized insurance areas.

Nowadays, most big brokers now have a direct dealing account where the broker brings a sub-broker to under writers and gives him permission to relate directly with them with a fronting agreement with their form of marketing. The account will be passed through the main broker. The main broker and the sub-broker shares the commission, with the sub-broker taking the lion share.

A vital restriction within the fronting agreement placed on the sub-broker is that he must within 90 days of risk inception transfer the premium to the main broker

 

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