Broker Change: Insurance Simplified

Changing insurance brokers is a simple process that can be done at any time and for a variety of reasons. Dissatisfaction with the current broker is a common reason for switching, including a lack of communication, slow response times, and a lack of understanding of the client's needs. Other reasons for changing brokers include saving money, changing insurance needs, and seeking improved service. The process of changing brokers involves selecting a new broker, making a formal appointment, and potentially drafting a letter of transfer or a broker of record letter. This letter is addressed to the insurance company and lists the policies to be transferred. The new broker will then guide the client through the process of cancelling their old policy and starting a new one. It is important to note that changing insurance brokers does not usually incur additional fees or charges.

You can change your insurance broker at any time

There are many reasons why you might want to change insurance brokers. Dissatisfaction is a common one—for instance, due to a lack of contact and communication, a lack of tangible value, or slow response times. You might also want to switch if your insurance needs change, or if you're looking for more competitive pricing.

The process of changing insurance brokers is simple. First, select a new insurance broker by asking them tough questions, such as what makes them better or different from your existing broker. Then, appoint your chosen broker to your account via a broker of record letter, which the new broker will prepare on your behalf. You will need to write a letter for each insurance company you have a policy with. The letter should be written on your company's letterhead and indicate your desire to have your new broker represent you. This is what insurance professionals refer to as your Broker of Record (BOR).

Your new broker will then send these letters to your insurance companies, and it usually takes 7-10 business days for them to recognise the new broker as your broker of record. During this time, the insurance company will notify your previous broker. While it's not required, it's considered good practice to also notify your previous broker of your intentions to change. Once your new broker is officially recognised, they will notify you and be able to service your policies.

Changing insurance brokers is usually free

The process of changing insurance brokers is simple and can be done in three steps:

• Contact a reputable insurance broker to get several quotes and professional advice.
• Compare the quotes to find the right coverage for your needs and budget.
• Select the policy that best meets your insurance needs.

Your new insurance broker will guide you through the entire process, including cancelling your old policy. To formalise the change, you will need to provide a signed letter of appointment (LOA) or broker of record (BOR) letter to your new broker. This letter should be written on your company letterhead and sent to each of your insurance company representatives. It will name the new broker as your new broker of record and list the policies you hold with that company.

Once you have signed the LOA or BOR letter, your new broker will send them to your insurance companies. It usually takes 7-10 business days for insurance companies to recognise the new broker as your broker of record. During this time, the insurance company will notify your previous broker. Although it is not required, it is considered courteous to also notify your previous broker of your intentions to change.

You don't need to inform your old broker

The process of changing insurance brokers is straightforward and can be done at any time. It usually involves getting quotes from different brokers, comparing them, and selecting a new policy. You can keep your existing insurance policies while changing brokers, but you'll need to submit a letter of appointment or a broker of record letter to each insurance company, stating your intention to switch.

While it's not necessary to inform your old broker, it's a good idea to be transparent and provide feedback if you feel comfortable doing so. This can help them improve their services and ensure a smooth transition to your new broker.

A broker of record letter is required for the change

A broker of record letter is a crucial document when it comes to changing insurance brokers. This letter is a legally binding contract that outlines the relationship between the policyholder, the new broker, and the insurance company. It serves as a formal agreement, allowing the new broker to act on the policyholder's behalf and make decisions concerning their insurance policy.

The broker of record letter is typically drafted by the new broker and then signed and returned by the policyholder. This letter is then presented to the insurance company, officially terminating the relationship with the previous broker. It is important to note that the previous broker will still receive commissions on the policy until it is time for renewal.

The broker of record letter is necessary to establish the new broker's authority to represent the policyholder and make decisions about their insurance. It grants the new broker access to all relevant information regarding the policy, including any existing proposals or documents. This letter also prevents the previous broker from making any further adjustments or negotiations with the insurance company on the policyholder's behalf.

When drafting the broker of record letter, it is essential to include specific details such as the name of the selected broker, the effective date of their appointment, the name of the group plan, and the terms for terminating the broker's appointment. This letter should be printed on the company's letterhead and signed by an authorized representative.

It is worth mentioning that the broker of record letter is not the only document required during the broker change process. Depending on the circumstances, other letters, such as an omnibus letter or a letter of appointment, may also be necessary. Nonetheless, the broker of record letter is a critical component of the process, providing a clear indication of the new broker-policyholder relationship and their authority to act on the policyholder's behalf.

You can keep your insurance policy when changing brokers

Yes, you can keep your insurance policy when changing brokers. This is a common occurrence when customers are looking for more competitive prices, improved service, or different coverages for home insurance, car insurance or other insurance.

To keep your insurance policy but change brokers, you will need to appoint the new broker as your broker of record. This is done through a broker of record letter, which your new insurance broker can arrange and submit on your behalf. This letter is used to legally establish the new relationship between the broker, the insurance company, and the policyholder. It is a quick and easy process and can be done at the time of your policy renewal.

If you are moving to another insurance broker and keeping your policy with the same insurance company, this is typically done at the time of your renewal without a cancellation penalty. However, if you decide to change brokers before your policy renewal date and get a new insurance policy before your current policy term expires, you may be charged a cancellation fee by your current insurance company.

Your new broker will help you determine which option is best for you and guide you through the entire process, including cancelling your old policy. They will also be able to assist with drafting the broker of record letter. This letter needs to be written on your company's letterhead and will be sent to each of your insurance companies' representatives.

It is important to note that you do not need to contact your old insurance broker to inform them of the switch. Once the letter of transfer is signed and submitted, the insurance provider will notify your previous broker. However, if you wish to be courteous or provide feedback, you may choose to do so.

Frequently asked questions