What is the Role of an Agent or Broker?
We always encourage consumers to shop around for auto insurance to obtain the best available coverage and service at the most reasonable price. Obtain at least three competitive rate quotes from three different insurers when shopping for auto insurance. Sometimes the best way to find a qualified car insurance company is a referral from a satisfied relative, friend or neighbor. But remember that some insurance brokers may not have auto insurance markets outside the Assigned Risk Auto Plan. In such cases, it will be in your best interest to approach other agents or brokers. Please note that exclusive or captive agents of an insurer cannot refer you to another insurer if you do not meet the direct insurer’s underwriting guidelines.
You
can seek the aid of any licensed insurance agent or broker when
buying insurance, or you may obtain coverage from an insurance
company that deals directly with the public, either through
exclusive agents or through its own sales representatives, or
through the Internet.
Insurance agents and brokers must pass licensing examinations given
by the Insurance Department, which require knowledge about insurance
rules, policies and practices. The distinction between insurance
agents and brokers is that an agent represents one or more insurers
for the purpose of writing policies, while a broker represents
consumers to assist them in obtaining coverage from one of the
companies with which that broker deals. Any of these "producers" (as
they are known in the insurance trade) can give you information
about the kinds of policies available and how to best protect
yourself. In addition, your agent or broker usually will be able to
assist you in the settlement of any claims.
If you are declined coverage by an insurer for any reason, be sure
to ask for a clear explanation. If coverage can be secured, make
sure you determine whether it is on a voluntary or residual market
basis, understand which auto insurer is providing the policy, and
request a detailed breakdown of the policy’s different coverage's,
deductible and premium components. Your agent or broker should
provide a written itemization of any quote.
Insurance agents and brokers typically receive a commission from the
insurer. Insurance brokers are not permitted to charge you any fee
for services without a written memo, signed by the
insured/applicant, which specifies or clearly defines the amount of
compensation (fee). The memo should also specify the services that
are provided.
If the placement is through the Auto Plan, a maximum fee of $40 may
be charged in addition to reimbursement for actual expenses for
other services provided, such as using certified mail, or electronic
policy binding. However, insurance brokers are not permitted to
charge you a fee for obtaining a Department of Motor Vehicles
driving record printout for a policy through the Auto Plan.
If the placement is in the voluntary market, fees are permissible as
long as you agree in writing, as noted above. An agent or broker is
not permitted to offer you cash, or anything of value over $15, as
an inducement to purchase insurance.