Are you shopping around for car insurance rates? Chances are, you have already requested quotes from the major insurers and are trying to decide if any of their policies are truly right for you. If so, then you are not alone. Thousands of other Americans, just like you, are facing the decision between car insurance policies every day.
If you need to find a car insurance policy in your state, there are three different entities with whom you can work. The first is the insurance company itself. If you are working directly with an auto insurer, you probably will call or fill out a form on their website to request a quote. The second option is an insurance agent who specialized in the sale of car insurance policies, most likely for one specific company. When you work with an agent, you might visit or call their office in order to request a quote. The third option is a car insurance broker. Brokers are generally self-employed and have no loyalties to a specific insurer.
For some people, working directly with the insurance company for their car policy is the best choice. In most cases, they offer consistently priced car insurance policies that take into consideration only the driving and credit history of the applicant(s). Working with an agent of that company is probably a little better for the applicant, because with an agent there is recognition. If a customer working with an agent experiences a problem with their policy, they have someone to call for a resolution. Sometimes, just having a specific name and phone number makes all the difference. Much like working with the insurer directly, an agent is fairly limited in the flexibility they can offer in their company’s car insurance policies. This is where the difference between an agent and a broker comes into play.
An insurance broker, as mentioned above, has no specific company loyalties. A broker is employed by his or her customers, not the insurance companies. What a broker does with your application is to offer it for bidding to many different insurers. The benefit lies with the customer at this point, because the broker creates competition between the car insurance companies and forces them to lower their price in the hopes of gaining a customer.
A broker will take the time to get to know every customer, finding out about their lives and families. Once he or she has learned about the customer, it will be easier to build a custom car insurance policy based upon their requirements and needs. Relationship building like this also goes a step further. The most important part of any relationship is trust. When an insurance broker show interest in the lives of his or her customers, they are working to create a certain level of trust.
In most cases, if you are online and see an ad that promises to delivery many different car insurance quotes from one single form, chances are that the person behind that website is actually an insurance broker. After all, an agent of one company would definitely not want to push customers away and into contract with a different insurance company. Completing this type of a form will do two things. First, it will get you a list of quotes for car insurance policies. Second, it will give your information to a car insurance broker who will then be able to target marketing in your direction based upon the information that you provided in their inquiry form
Both insurance company agents and car insurance brokers are required to be licensed for each state in which they intend to sell car insurance policies. In Hawaii, insurance agents and brokers are required to actually live within the state. The insurance industry is regulated by individual states. Some states will allow licensed insurance professionals from bordering states to sell policies in their states. Other states will offer reciprocal licensing for agents and brokers licensed to sell in any state.
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