Insurance Brokers across the globe are called Independent Intermediaries, meaning, they do not represent any specific Insurance company like Insurance Agents, but they represent the policyholder or the customer.
In other words, Insurance Brokers are experts on the side of the customer, advising the customer while buying insurance and assisting for faster settlement of claims.
Insurance is a case of solicitation by the customer: This phrase is familiar to many of us, but most do not know the real meaning of it. In Insurance, the customer needs to declare the risk for which he is seeking cover through a proposal and he has the binding on presenting fairly what he needs cover for.
Thus, an expert on the side of customer (just like an advocate for his client in the court of law) is required to understand the risk scenario and present it in a fair and transparent manner to the Insurer to seek insurance cover. The insurance broker also fills the gap while advising and explaining the covers, terms, conditions and exclusions of the proposed insurance cover to the customer with a comparison of premiums from various insurers.
The insurance broker also supports the customer in advising and guiding on paper work and procedures during claims. This will ensure clarity in the process and faster settlement of claims.
We can cite numerous instances and stories to showcase the importance of insurance brokers for customers.
The following are a few of the instances that prove the importance of an insurance broker being on the customer’s side.
There are many instances where hospitals will deny ‘cashless facility’ even though the insurance company has a tie-up with them. There are various reasons for these denials, due to which the customers are put in to great difficulty for want of cash, over and above the emotional pain they undergo.
A responsible and committed insurance broker will ensure involving the TPA or the Insurance Company to coordinate with the hospital for acceptance of cashless treatment. This has happened many times and still happens to our customers. We have always stood for the customer and ensured effective coordination until acceptance of cashless procedure.
There are many instances where businesses and industries go for insurance cover for their facilities against fire, burglary and other perils without proper declaration of asset values and coverage terms.
While covering business property, the customer has to declare the replacement/reinstatement value of the property to arrive at the Sum Insured requirement and specify the coverage terms as ‘replacement or reinstatement value basis’. Otherwise, the property is said to be ‘under insured’.
In many cases, the customers declare ‘book value’ of assets to arrive at the Sum Insured. In such cases, the cost of replacement of assets or reinstatement of buildings is likely to be very high compared to the Sum Insured. This is called as under insurance and will also entail proportionate deductions in claims to the extent of undervalued declaration of assets.
Many customers have suffered and are suffering due to lack of understanding of this concept during purchase of property insurance for their businesses. They tend to weigh only the lower premiums and not the coverage, terms and conditions.
A responsible broker will guide and assist the customer to represent such things properly to the insurer and ensure comprehensive coverage and avoid difficulties during claims.
An employee of a corporate company sought claim under their group health insurance policy for his child’s treatment towards external congenital anomaly. He sought the hospital for processing of ‘cashless’ facility where the customer need not pay the treatment charges upfront and hospital will get it directly reimbursed from the insurance company.
The hospital denied cashless facility, advising the employee to pay the amount and get it reimbursed from the insurance company. Due to perceived urgency, he paid the amount and completed the treatment for his child.
Subsequently, when he filed the claim with the insurer, they declined to settle his claim because the ailment and treatment were excluded in the policy terms.
Since, the policy was bought through the company’s bank, there was nobody to assist and advise the employee on whether the claim is admissible or support his instance of cashless treatment.
The customer also understood that there were cheaper treatment solutions available for the same ailment later on.
In case, if an insurance broker assisted, the employee would have been prompted to contact the broker before the treatment for cashless approval. The broker would have definitely advised the employee about the non-admissibility of the ailment and treatment for claim. Though it was external congenital anomaly, it was indeed critical but alternate steps could have been taken to keep the cost within the economical means of the customer.
Most of the customers do not know the procedure for claims, which will result in inordinate delays in settlement. They usually inform the respective insurer and expect things to figure out on its own. It is an honest expectation, but there will be certain procedures like filling of forms, follow up for survey and submission of appropriate papers to get the claims settled within a reasonable period of time.
A responsible broker ensures timely guidance to the customer and follows up with the insurer and enables settlement of claims within stipulated Turn Around Time (TAT).