What Is a Broker of Record?
A broker of record can work either in the insurance industry or in the real estate industry. In the insurance field, the broker of record is an designated representative chosen by the insured to advise the insured customer on matters of insurance. More commonly called a broker or agent, the broker of record often acts as a liaison between the customer and the company. Though it is usually used in the insurance field, this term is occasionally used to describe certain real estate brokers. "Broker of Record" may also refer to a letter that the policyholder or real estate customer must send to confirm a relationship with a broker in writing.
In insurance, a broker of record can work independently or in alliance with an insurance company. Paperwork and communications sent to and from the insurance company go through the broker. Brokers often collect commission from the insurance companies whose policies they sell to the policyholder. Independent insurance brokers receive commissions from multiple insurance companies, while an affiliated broker only receives commission from the affiliated insurance company. Brokers are most often used by consumers of life insurance and property insurance.
Policyholders can benefit from consulting a broker if they are unsure about which company or policy specifics to choose. Brokers can help explain insurance policy detail and guide the policyholder into choosing the best insurance policies for her individual situation. Because he has more knowledge about the insurance agency, the broker may be able to get the policyholder a better deal than she would have found working alone.
With online insurance purchases and insurance comparison websites becoming more common, consulting an in-person broker can prove inconvenient. The Internet has a large number of websites dedicated to providing service and information for insurance seekers, so consulting an agent is not always more effective or efficient than online research. Buying an insurance policy online can also be less pressure for customers who dislike in-person sales.
In the real estate business, a broker of record is one type of licensed real estate broker responsible for keeping the real estate firm in compliance with local codes and regulations. A real estate broker of record is largely responsible for making sure the real estate company is operating legally. He is usually charged with making sure that the other members of a real estate firm are correctly licensed to keep the business out of legal trouble. A real estate broker of record may also assign agents to work with specific buyers.
Written by H. Bliss
