by leeleerambles » Tue Nov 08, 2011 05:07 pm
Maybe I'm naive...why would a company try and call insurance companies directly and spend so much time when they could just hire an insurance broker to get them business insurance? Seems so simple...No cash outlay, no risk. What am I missing?
Posted: Tue Dec 11, 2012 01:17 am Post Subject: Insurance Brokers
I am not sure why people would skip the insurance broker. The insurance broker will walk you through the risks of your business and help you determine the type of coverage you require. Then they will search for insurance from multiple carriers to get a few quotes. It saves the business owner a lot of time and effort.
Posted: Tue Dec 11, 2012 05:15 pm Post Subject:
I am not sure why people would skip the insurance broker
Where would Home Depot be if folks didn't "skip the licensed contractor"?
It's the same discussion when you change the words to insurance broker/agent. People think they're going to save money if they "skip the middle-man". What they sometimes don't realize is that they won't pay less for their insurance on their own -- the insurance company can't really charge different rates to folks who go through an agent than they charge folks who purchase online directly from the insurer. The insurer just makes a little more profit on their direct sales.
We've all heard the horror stories about plumbers, painters, building contractors, and others who collected money for a shoddy job, or collected money and did nothing. Some things can be done "Do-It-Yourself" style, and some things cannot. And folks have heard about insurance agents who took the money for a policy and never provided the coverage. It happens.
As a licensed Broker-Agent, I choose to use the services of other brokers for most of my personal and business insurance needs. I could do it all myself, if I chose to, but I don't have access to as many companies as my brokers do, and they can get me better products than I can get.
People who DIY insurance may have the knowledge necessary, or they may only be interested in the lowest price. Either way, they get what they want. Unfortunately, for some, they don't get what they need.
I always tell folks here to use the services of a local independent agent or broker, because that's a prudent recommendation.
Posted: Mon Feb 11, 2013 05:28 am Post Subject: Why not use insurance broker ?
Brokers often represent only a small number of companies and even some even only one company which means they are not comparing many quotes for you. This may be the reason that some people do not prefer insurance broker.
Posted: Thu Mar 05, 2015 10:47 am Post Subject:
An agent must know the insurance laws and rules. They can simply fight against the situation. If you hire any insurance agent that's really good for you.
Posted: Fri Mar 06, 2015 02:54 am Post Subject:
Both of these last two posts are wrong. First, going back to 2013, BROKERS do NOT represent insurance companies, they represent clients to insurance companies, so the likelihood of them only representing "a few" companies is low. BROKERS may charge fees to represent clients and collect commissions from the insurance company, too.
Now to 2015, no one HIRES and AGENT. Agents are non-employee representatives of insurance companies and get paid commissions from the insurance companies for the products they place in the hands of their clients. AGENTS cannot charge anyone a fee for anything they do -- that's against the law in all US states. Agents may represent just one company (called a "captive" agent) or may represent many companies (sometimes called an "independent" agent).
Some people believe that AGENTS put their own self interests above those of the clients they serve. If that's true, the agent has violated state insurance laws and can lose his/her license. Does it happen? Yes, of course it does. There are bad actors in every profession. Should it happen? Never.
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