What is the difference between an insurance agent and broker?
Both agents and brokers must be licensed in every state in which they conduct business. If a broker sells insurance in a state where he does not reside, he is considered a non-resident broker in that state and must abide by the insurance regulations in that state. To obtain an insurance license, the agent must study the insurance regulations in the state and be familiar with the terminology, practices, code of ethics and various types of insurance. Prior to becoming licensed, he must pass an exam that is issued by the Department of Insurance. If any agent represents only one insurance company, he may have bias that favors the insurance company that he represents, but is also inclined to know more about the product that he is selling than a broker that offers the same health plan, but also represents other insurance companies. A broker, since he represents several insurance companies, is less biased in the products that he is selling. Both agents and brokers are paid a commission by the insurance company for each month that their clients remain insured under the health plan that was sold to them by that agent or broker. Some brokers may charge a fee for their services, but this is not standard practice. Most brokers are content with the commission they receive and do not charge extra fees to their clients. The premiums that are quoted by an agent or a broker must be identical to the premiums available through the insurance company and agents and brokers are restricted by law from adding a surcharge to the premium payments. 1 CommentLeave a comment |
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What is the difference between an insurance agent and broker?
In many respects, these two terms both mean a person or company that markets and sells health insurance to the public. An agent is an insurance company representative who solicits, negotiates or effects contracts of insurance and provides service to the policyholder on behalf of the insurance company. A broker is a marketing specialist who represents buyers of health insurance and who deals with other agents or companies in arranging for the medical insurance coverage for their client. Brokers usually represent more than one insurance company and assist their clients in reviewing many medical insurance plans. A broker is a licensed agent for the insurance companies for whom is he authorized to write policies. Some agents work exclusively for one insurance company, so they are not considered brokers.
I have found that when you are shopping for health insurance online that you are best of going with a broker. As you say in your article, they are less likely to be biased towards one company. First of all you will want to check up on the brokers qualifications. Not everyone in the insurance field is qualified to broker deals for you. I always look for professional affiliations before I make a choice. I also look at a number of other things before choosing a broker. Some of the things I look for when searching for health insurance online are these:
Services:
I ask what kind of of insurance they offer and are specialized in. If you are looking for health insurance then you want an expert in that field.
Experience:
You want to make sure that your broker have the experience necessary to match your needs.
Staff:
I always ask about the office staff. If the are qualified to handle my questions?
References:
You should ask your broker if they have a list of clients you can contact to get references.
Comment by Anthony — May 25, 2009 @ 8:13 am