7 Signs Of Unethical Insurance Broker

5 June, 2018

How do you know if your broker is not being professional? It can be difficult to know, but there are some red flags you should watch out for as a customer. Here are 7 signs that your broker may be doing something wrong.

1.Your broker is very aggressive and tries to push you into buying a policy right away.

Beware of a broker who says that you need to buy a policy immediately because "this deal won't last long" or "the premium is about to go up." An ethical broker will explain the options available to you and encourage you to take as much time as you need to evaluate them.

The broker gets insurer to quote a premium that seems very low (under cutting)

While premiums can vary from one insurer to another, they usually fall within a fairly close range. Be suspicious of any premium quotation that is markedly lower than others you have received because the insurer is in need of the business at all cost. It may affect you when there is a claim

Your broker is difficult to reach by phone or email or takes a long time to respond to messages.

A professional broker will respond to phone calls or emails within a day or two. He or she should have a valid business phone number and email address. Avoid any broker who communicates solely via his or her cell phone or personal email address. Make sure the broker has an actual physical business address.

4.Your broker adds coverages to your policies that you didn't request or need just to increase your premium

Most brokers and agents earn commissions from insurers on the premiums you pay. Commissions are based on a percentage of the premium, and they vary by line of business. The more premium you pay, the more commission the agent earns. An unethical broker might try to generate premium by adding coverages to your policy that you haven't requested and don't want. Check new policies to ensure they contain only the coverages you requested. Scrutinize any requests for additional premium that you receive from your agent or insurer after the policy has been issued.

5.When you ask your agent about his or her experience and credentials, you get a vague response.

Ask your agent to provide his or her license number. Then verify that the license is active by contacting National Insurance Commission. Do enough background check of the broker before doing business with them.

6.You have paid your policy premium but your agent has not provided any policy documents.

Some brokers collect premiums from customers but then keep the money rather than forwarding it to the insurance companies. Demand your receipt, debit notes, certificates and policy documents within reasonable time. Demand for further explanations if there is lack of clarity.

7.Not following standard procedures to submit your application to insurer (containing wrong information about you).

A dishonest broker may lie on an insurance application to bypass the insurer's underwriting rules or to make your business more attractive to the insurer. For instance, your agent shows "no previous losses" on the application when you've actually had two prior claims. When the insurer discovers the truth, your credibility will be destroyed along with the broker.

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