MONDAY, DECEMBER 3, 2012
If you work in the insurance industry, you can easily spot the differences between a direct writer (who you know as your agent) and an insurance broker. But if you don't work in the insurance industry, that sentence could just as easily sound like a foreign language.
There are two main types of agents: direct writers, who represent only one company (such as State Farm or Shelter Insurance), and brokers (such as CLH Insurance), who generally represent many companies. At CLH, we want to help our customers make intelligent & informed decisions regarding their insurance. Understanding how we, as a brokerage, operate is a large part of the foundation for accomplishing that. Let's start by addressing two common broker myths.
MYTH #1: All Brokers are Agents & All Agents are Brokers: They are the Same Thing
By general rule, brokers are agents. But all agents are not necessarily brokers. A brokerage partners with an array of companies, while a direct writer has loyalty to the company he/she works for. When a direct writer only represents one company, they are under a contract to sell that company's products. Direct writers act on behalf of the company they represent; a broker acts on behalf of their customer. Through partnerships with many companies, a broker can approach several of them to help the customer make the best choice for their needs.
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MYTH #2: A Broker Charges Extra for Their Service
This is something we are hearing more and more - that you have to pay an additional fee to purchase insurance through a broker. Brokers and direct writers are paid the same way; both receive compensation from policies written through the company they write it with- which is built into your insurance premium. Whether you go through a direct writer or a broker, you are paying for the time, the effort, and the expertise & advice of an insurance professional to help you cover your life, assets, and future.
Working with a broker gives you, the customer, more freedom and choices. It is a direct writer's job to sell their company's products; its a broker's job to "shop" various carriers and find something that fits the customer's needs.
Another benefit of purchasing insurance through a broker is the ability to develop a relationship with your agent that will last. In the event that you face major life changes and your current policy no longer fits your needs, your broker has many other resources to find something better suited to you.
Specifically at CLH Insurance, we offer multiple lines of insurance. We do this so that our customers have the option to make insurance choices for their home, auto, health, business, life, etc. all in one place. They know that if they have questions, concerns, or need to make changes, they call one place - CLH, Their Insurance Connection.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only.
It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional
in your state. By using this blog site you understand that there is no broker client relationship between
you and the blog and website publisher.
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