Question 1

What duties does an insurance broker owe you?

Accepted Answer

A broker generally acts as **your agent**, not the insurer's — which is the distinction determining what they owe you and who is responsible when something goes wrong.

**What that means.** As your agent, a broker owes duties to you: to exercise **reasonable skill and care**; to understand your requirements; to recommend suitable cover; to explain material terms; and to act in your interests.

**Their regulatory obligations.** Insurance distribution is regulated by the FCA, requiring firms to act honestly, fairly and professionally in the customer's best interests, and — under the **Consumer Duty** — to deliver good outcomes for retail customers.

**What a broker should actually do for you:**

**Establish your demands and needs**, and provide a statement of them.

**Search an appropriate range of the market**, and tell you the basis on which they searched — the whole market, a limited panel, or a single insurer. **You are entitled to know which**, and it matters considerably.

**Explain significant exclusions, conditions and warranties**, particularly those imposing obligations on you.

**Assist with the presentation of risk**, which is where their value is greatest — they know what insurers regard as material.

**Handle claims** and advocate for you.

**How they are paid, and why it matters:**

**Commission** from the insurer, which is the traditional model and creates an obvious tension — the broker is your agent while being paid by the other party.

**Fees** charged to you directly.

**Both**, in some arrangements.

**Disclosure.** Commercial customers are entitled to ask about commission and to be told. For consumers, disclosure requirements apply to fees, and the FCA has scrutinised remuneration arrangements, particularly where commission is not proportionate to the work done.

**Where a broker may act for the insurer instead** — under a binding authority or delegated arrangement — their position differs, and this should be disclosed.

**If something goes wrong.** A broker who fails to arrange the cover you asked for, fails to disclose a material fact properly, or fails to explain a condition you then breached, may be liable. **Brokers must hold professional indemnity insurance** for exactly this.

**Complaints** go to the firm, then to the **Financial Ombudsman Service**, which is free.

General information, not advice.

Question 2

What is the difference between an insurance broker, an agent and a comparison site?

Accepted Answer

The critical question with all three is who they act for and how they are paid, because that determines whose interest the recommendation serves. A broker acts for you. They are independent

Question 3

Who does a loss adjuster actually work for?

Accepted Answer

The insurer pays them — and understanding that, without overstating it, is the key to dealing with one sensibly. What a loss adjuster does. They are appointed by the insurer to investigate a claim,

Question 4

How do insurers decide how much a claim is worth?

Accepted Answer

By applying the policy's basis of settlement to an assessed loss, then deducting anything the policy allows. The figure is rarely what you paid or what you feel it is worth. The sequence, broadly:

Question 5

What is the difference between a policy schedule and the policy wording?

Accepted Answer

The schedule contains what is specific to you; the wording contains the terms that apply generally — and the two must be read together, because neither is the policy on its own. The policy schedule.

Question 6

What does utmost good faith mean in insurance?

Accepted Answer

A heightened duty of honesty and disclosure between insurer and insured — historically far stricter than in ordinary contracts, and substantially reformed in the UK because the old rule produced

Question 7

What happens to an insurance policy when you sell the item or die?

Accepted Answer

Insurance is a personal contract between the insurer and a specific policyholder covering a specific insurable interest. When that interest ends, the cover generally does — and the details differ by

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