Taxes & business banking for the self-employed


Freelancers - Do You Need a Broker For Insurance?

Last updated on Feb 21, 2020

Kate Bailey

Freelance Editor

Mar 25, 2019


Different options on the way to the right insurance

If you Google with enquiries for insurance, you will immediately see an endless list of self-employment insurance brokers. Like all things on the first page of Google, don’t just use the first page of Google! As with any other offer, it's not easy to find the right person to talk to about your personal concerns, who also acts independently. If you feel pressured during any time you make an enquiry, be aware this could be a good sense of intuition at play: many brokers are chasing commissions and might not be making the advice that is right for you but rather the advice that is right for them. That said, not everyone and everything are sharks, not to vilify sharks, so let’s get a good overview of what you’ll be looking at. Stay ahead of the game for a moment:

Digital Insurance Brokers:

Termed digital insurance brokers for self-employed and entrepreneurs such as there are many similar companies in this department. Nearly always there is a comprehensive overview of all current and necessary insurance that exists in the context of self-employment. A search box will allow you to enter your freelance activity and you will be shown the insurance policies recommended for your area. This is actually a really handy tool, as we have discussed before it can be a little unclear exactly what is needed in terms of insurance and profession. Likely, at this point, you can start to reveal a number of quotes. In addition, you can also inform yourself personally at the digital insurance brokers via a hotline but how good or well-founded these consultations are cannot be proven at this point. Basically, if you have previous knowledge and know exactly what you need, these digital providers are a quick, convenient and easy way to your necessary insurance. There is also the opportunity to use digital financial planners who look at your life situation and determine the need for insurance.

###Common Insurance Companies Well, any Star Wars fans might be hearing the tune of the Imperial March in their head right now. It is true insurance companies rarely have a good reputation. That said, there are certain protections when it comes to signing up with one of their companies. It could be a really safe move in that sense. Also, perhaps from your home country or for personal insurance you are already using a company that you like. In the event this is the case, it is definitely worth asking because you may then get more favorable conditions if you take out further insurance. And if you do not get offered this, take your business elsewhere! An important note regarding this: if you directly contact an insurance company, you will be dealing with an insurance agent who is employed by this insurer or, as a commercial agent, normally concludes contracts only for these insurance companies (single agent representative). He is not allowed to offer or complete other insurance companies.

This advantage is obvious: The representative knows their company products optimally and can advise you perfectly. The disadvantage of this is that they can only offer you this product which means you do not get much choice or comparison options. In addition, the consultant gets a commission and is dependent on the sale of his products, so he will, of course, highlight the positive aspects of a policy. But, there is nothing stopping you from calling multiple companies to get the same high level of service from an agent - and then take the insurance that suits you perfectly!

What else should you be aware of?

There are also the so-called multiple agents, who work like the sole agents, but have several insurers in their portfolio. That’s a broker, you say! Well, no. In contrast to an insurance broker a multiple agent usually has to adhere to the strict sales specifications for the products of its insurers. The advantage for you compared to a single agent representative is that you get a much broader selection - but there is a disadvantage here as well: The multiple agent represents the sales interests of the companies he works for. You may end up with the best rate he can offer you from his portfolio, but may not be the most optimal product currently available on the market. Be sure to research the reputation and client experiences of Multiple Agents - as you would, even your favourite brunch location!


Things to know about specialised insurance brokers

An insurance broker does not have a fixed contract with one or more insurance companies and consequently is not bound to them or does not have to fulfil any requirements. You have to hire an insurance broker so that he can get started with this specific work for you. He is committed to openness and transparency towards you. These are his clear obligation. As an example, he has to tell you why he did not include this or that company in an individual offer. If you are uncertain or in doubt, always ask. In this circumstance, you have very explicit rights as the customer. When it comes to commissions, be duly attentive. In the case of expensive long-term insurance contracts, for example, these are particularly high for an insurance broker. A big incentive for an insurance broker - not you, so be mindful here.

Good to know, how do I manage it? You should pay attention to this:

Always insist on a detailed consultation, in which it is taken seriously to explain the pros and cons of a particular policy and in any case, how high the connection and distribution costs of each insurer, because these are costs that you pay for your contributions. If you hire an insurance broker, you make a brokerage contract with him, either in writing or verbally and these factors will play into how much money ultimately leaves your wallet! If only there was insurance broker insurance… that said, a majority of good, trustworthy folk who do want the very best for you. It just important, like with all things in business, to pay attention at these crucial points. Some insurance policies are essential for the self-employed, but you should not overdo it and been ladening yourself with heavy or high fixed costs as you establish your business here in Germany. You can not insure against all eventualities, and if you try, it gets extremely expensive.

So, stick with the advice of this article and the proven ways to get results to protect against the unexpected: think about which cases for you and your self-employment could be a threat to your existence or which high follow-up costs might be due to you. Then, rely on this Kontist article to help you from there...