The local agent represents a carrier in a given city or town. He will ordinarily represent more than one carrier: he may represent both stock and mutual companies. The commission received by the local agent naturally is less than that paid to general or regional agents. The local agent performs little technical insurance service.
These services are performed by the true regional or general agent, or by the branch or home offices. The local agent is principally a salesman; his job is to acquire business and to give home insurance quotes to his clients.
However, for fire insurance, he is usually a recording agent; that is, he prepares and countersigns policies in behalf of his companies. In casualty insurance, he is often no different from the regional or general agent, except that his commission rate is less and he writes less business.
Attached to the home office, branch office, or general agency may be found a representative who solicits exclusively for a given carrier or general agent. He is known as an "office agent." Although he is considered an employee of the carrier or office, his only pay is a commission for the business he produces, generally at the same rates as are offered a local agent.
The office agent, however, may have a better net income than the local agent, since his office, office supplies, and other services are furnished to him. An office agent may ask for and obtain permission to write business in companies other than that of his benefactor.
Not all private health insurance providers are anchored to companies by agency contracts or by employer-employee relationships. Some are freelance operators who shop around to find the best type of coverage possible for the insurance buyers who are their clients.
These producers are called "brokers." Theoretically, brokers are agents of insurance buyers and not agents of the companies in which they place their business. Nevertheless, they are paid by the companies in the form of a commission.
The clients they serve are not required to pay the broker a cent directly. Of course, the premiums they pay for their insurance are "loaded" to take care of all commissions. So, indirectly, the client pays the commissions of both the agent and the broker.
The broker's commission is usually a little less than that of the agent. This allows the agent to accept business from a broker and still retain a slight margin of profit. Brokers, however, may place their business direct with the company rather than through an agent.
Some insurance brokers operate solely as insurance salesmen, providing no technical insurance service. They depend upon the companies to provide these services for their clients. Other brokers maintain a staff of engineers to help their clients obtain the best rate possible for their cheap-insurance-rates.com/home/saving-on-homeowners-insurance.cfm cheap homeowner insurance. These engineers check the exposures of their clients and the rating procedure of their companies. They also advise on loss-prevention activities.
Brokers are more prominent in metropolitan areas, operating extensively among business corporations with large exposures. They may become virtually insurance managers for some corporations. Some insurance brokerage firms are national in scope; a few are even international.
Brokers are not prominent in life insurance but are very important in the fire and casualty lines; they are most important in the field of marine insurance. Some producers may be both agents and brokers, operating as brokers in a metropolitan area and as agents in their suburban home communities. Some function as agents for life insurance companies but as brokers for fire and casualty insurance.
A final type of producer is the solicitor. He usually cannot bind the company or write policies. He simply finds prospects for insurance and then handles the business through a local agent, broker, or company branch or service office.
Allison Ryan is a freelance marketing writer from San Diego, CA. She specializes in financial planning, business finance, and different types of insurance, including private health insurance and cheap homeowner insurance. For a wide variety of affordable insurance policies, check out cheap-insurance-rates.com cheap-insurance-rates.com/.
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