Up
until fairly recently,
only registered members of the British Insurance Brokers’ Association (BIBA)
were entitled to call themselves car insurance brokers. What a car insurance
broker does is act as a go between or intermediary to match potential customers
with insurance companies. They go to the whole market and select the best deal
for the customer.
Under
BIBA’s operating rules all car insurance brokers must be independent and are
obliged to champion consumer interests first and foremost.
Hold
on, didn’t BIBA use to be called the British Insurance and Investment
Brokers’ Association (BIIBA)?
Yes.
Set up in 1977 to represent independent insurance brokers, the organisation
changed its name to BIIBA in 1988 when they began accepting Independent
Financial Advisers into their ranks. However, in 1999 they reverted back to
their original name after the formation of the Independent Financial Advisers
Association.
How
do I check if a company is a registered car insurance broker?
The
BIBA website enables users to
search
for registered brokers.
What
standards can be expected of a car insurance broker?
BIBA
registered brokers must adhere to strict operating practices and standards, much
of which is designed to protect consumer interests. In order to register with
BIBA as a car insurance broker, a company must meet certain criteria including:
-
registration
with the Financial Services Authority (FSA)
-
independence
from car insurance companies
-
BIBA’s
solvency and financial standards.
What
are the advantages of using a car insurance broker?
The
main advantage of using a car broker is that they are experts in their field and
can more easily and accurately compare insurance quotes on a like-for-like
basis. No-one likes the tedium and time-consuming nature of shopping for car
insurance. Car insurance brokers, then, are like personal shoppers who do all
the legwork. And because car insurance brokers are obliged to go out to the
whole market in search of the best deal, you can be reassured that their
recommendations are not biased or skewed due to other business considerations.
Car
insurance brokers also have access to special rates not open to the public and
will generally do a much better job of negotiating for discounts on car
insurance quotes. In addition, a car insurance broker will fight your corner
with the underwriter should you have a problem or need to make a claim.
How
much do car insurance brokers charge?
Nothing.
They’re paid a commission by the company with whom the customer takes out a
car insurance policy.
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