How do I compare insurance brokers?

General advice only · AFSL 222640 · Global Mutual Funds Pty Ltd

The direct answer

Compare brokers on four things: licensing (an AFSL or authorised representative status you can check with ASIC), their experience with businesses or risks like yours, how they are paid (commission from insurers, fees, or both), and what they do at claim time. A good broker explains why they chose the insurer, not just the price.

What it depends on

The full answer depends on your specific circumstances. Here’s what matters.

Licensing and codes

Brokers must hold an AFSL or be authorised under one, and belong to AFCA. Many subscribe to the Insurance Brokers Code of Practice, which sets service standards you can hold them to.

Remuneration

Brokers are commonly paid commission by the insurer and may also charge a broker fee. Both must be disclosed. Ask for the dollar amounts.

Market access

Ask how many insurers they approached for your risk. Some brokers work with a narrow panel; that is not wrong, but you should know.

The last 10%

What a qualified professional can add

The answer above covers the general position. Here’s where professional judgement — applied to YOUR specific situation — makes the difference.

Mapping your actual risks before recommending cover
Approaching multiple insurers and explaining the trade-offs
Managing claims and disputes on your behalf

Questions to ask before you engage one

If you decide to engage a professional, these questions help you evaluate whether they’re right for your situation.

How many insurers did you approach, and why did you recommend this one?

What will you earn from this policy in commission and fees?

What exactly will you do for me if I need to claim?

Do you subscribe to the Insurance Brokers Code of Practice?

Your next step

Ask any broker you are considering for their Financial Services Guide and a written explanation of how they are paid, then compare two brokers on the questions above.

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