What is the benefit of having a written brokerage agreement?

Having a written brokerage agreement is essential primarily because it clarifies the roles and responsibilities of all parties involved in the transaction. This clarity helps establish a mutual understanding between the broker and the client about what is expected during the insurance procurement process. A well-defined agreement reduces the potential for misunderstandings, disputes, and confusion by outlining what each party's obligations are, the scope of the services provided, how commissions will be handled, and any other specific terms relevant to the transaction.

Additionally, while it's true that written agreements can also help satisfy certain state regulations or even potentially enhance a broker's reputation, the core purpose and benefit lie in the clear delineation of responsibilities. By providing a framework for the relationship, it ensures that both parties are on the same page, ultimately leading to a more effective and efficient transaction process.