Business insurance - agent or broker?

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PostPosted: Mon Jan 18, 2010 12:18 pm   Post subject: Business insurance - agent or broker?  

I'd love to know the different factors that are to be considered while choosing a business agent. Or is it better to go for a business insurance broker instead?


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RogerTx
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PostPosted: Tue Jan 19, 2010 2:11 am   Post subject:   

One is acting as an agent when they represent the interest of a specific insurance company. One acts as a broker when they act as an intermediary between you and an insurance company.



Is one better than the other? While many would suggest the broker is less partial and will find a more favorable solution to your insurance needs, the truth is it really depends. There are a lot of shady brokers (independent agents) just like there are a lot of shady agents. The bad news is shady brokers don't have quite as much oversight, so they can often continue questionable practices without much recourse (i.e. when you are upset with an agent, you can complain to his or her company; when you are upset with a broker, complaining perhaps to the company's whose products they've sold to you usually has less of an impact).



Get to know someone, or a few people and go with your gut. If they wind up sucking and not being your best bet, find a new one. You'll never know if you've made the absolute right choice, you can either work youself into a fit and accomplish next to nothing, or you can accept this and try to make the best decision with as much information as is available.

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PostPosted: Tue Jan 19, 2010 5:57 am   Post subject:   

Why do you think it has a lesser impact when we complain regarding the products that a broker has sold to us?

Is it due to a broker's limited network?


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anonymous00
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PostPosted: Tue Jan 19, 2010 2:14 pm   Post subject:   

The broker and the insurance company have less responsiblity to one another, and the insurance company has less control. Say a broker sold the guy down the street something that was completely unreasonable from insurance company A and he complained. There could be a lengthy complaint process that could ultimately end up in the broker's loosing his or her license, but say it's something like the broker lied and/or misrepresented a product. There are steps the insurance company and the client could take to escalate the situation, but usually that doesn't happen. Instead worst case scenario for the broker is the insurance company decides to end the contract they have with him.



If the broker where instead an employee, the potential to lose his job is much higher. Now it's completely possible for the fired agent to find another job inside the industry, but it would come with a degree of difficulty. Even going independent and looking for appointments as a broker might prove more difficult. For the already established broker, losing a contract with one insurance comany usually has little impact on the contracts held with other insurance companies.



This isn't to suggest that you shouldn't work with brokers. It's just a heads up. Both have their advantages and drawbacks.

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PostPosted: Wed Jan 20, 2010 6:21 am   Post subject:   

Quote:
The broker and the insurance company have less responsiblity to one another, and the insurance company has less control.


Absolutely! It's thus important to run a check no the broker's track record. You should know if he has a valid license. Past complaints arising out of errors or fraudulent activities should be disclosed with you. You should also reject a broker on grounds of administrative charges.
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PostPosted: Thu Jan 21, 2010 9:18 am   Post subject:   

Whenever you're required to hire any insurance professional, make sure you make it a point that you're getting into an agreement with him. Make it very clear that the agreement might be terminated or you may choose to discontinue with his services if you're not satisfied. This would force him or his company to offer the best of their services to you.

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PostPosted: Fri Jan 22, 2010 7:30 am   Post subject:   

Quote:
This would force him or his company to offer the best of their services to you.


Yes, you should make things very clear before you'd sign up!

They should be in a position to call you back within 24 hours. They should provide you with the premium statements and bills on time. Always, let them know that you might choose to work with other professionals if they're offering much better service.
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PostPosted: Fri Jan 22, 2010 10:06 pm   Post subject:   

I don't know if I'd spend a lot of time reminding them there are other agents out there. You'd sooner be told to go work with them than get the agent/broker to give you any better service. These interactions will always be a two way street. Yes you can dump them if they are a bad agent/broker, and they can dump you if you are a bad (read PITA) client.

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