Selecting an Agent or Broker/Agent
If you are selecting an agent or broker for the first time, one of your best resources in selecting that individual is an already satisfied client! Ask your relatives, neighbors or co-workers about their agent and their insurance company and the level of service and professionalism their agent gave them. Have they experienced a claim? How did their agent and company respond? Has their agent been courteous and prompt in responding to their questions and needs? Did their agent take the time to fully explain the terms and conditions of their policies? Does their agent periodically contact them to update coverages? These are all excellent questions to ask when selecting someone to protect you, your family, and your assets.
Once you have selected an agent to deal with, you may wish to verify his or her licensing status with the Department of Insurance. Inquire of their license(s), as they must be posted in view of the public. Ask the agent how long they have been licensed and ask what insurance companies they represent. It is wise to shop for coverage among several insurance companies and among several agents to determine the best insurance coverage for your needs. James Amaro, a Houston truck accident lawyer with a lot of experience working with insurance agents himself, has put together this consumer guide.
Defining an Agent or Broker/Agent
An agent can be licensed to sell life insurance, disability and health insurance or fire and casualty insurance. The term broker/agent is used to describe two distinct types of licenses. The title broker/agent does not automatically convey both types of licenses upon the holder, unless he or she qualified for and was issued both types of licenses.
A broker/agent acting in an agent capacity is generally a person who is appointed (authorized) by one or more specific insurance companies to sell their products. The agent by virtue of the appointment(s) is considered to be working on behalf of that insurance company when he or she sells you their policy. For this sale, the agent will receive a sales commission from that insurance company. The agent with this license can only transact insurance with those insurance companies for which he or she has an appointment.
A broker/agent acting in a broker capacity is generally selling insurance with companies that have not appointed him/her. In essence, he or she is shopping for or brokering the insurance among many insurance companies for which he or she will receive a sales commission. In this capacity, the broker represents you, the insured, not the insurance company. This license allows the broker to charge you a brokers fee for their services, in addition to any commission they might receive from the insurance company.
Your Job as a Consumer
As an informed consumer, you should always obtain copies of the documents relating to your insurance transactions. Ask for a copy of your insurance application, your binder (temporary policy of insurance good for up to 90 days, pending issuance of your actual policy), if issued, a receipt for the premiums and/or fees that you have paid and showing the balance of premiums owed, if any. The receipt and application should specify the actual insurance company that is being used. Your lender or lienholder will require this information and may or may not approve of the insurance company your agent has elected to use.
NEVER sign blank forms or blank applications. This only invites mistakes, misunderstandings, and possibly fraud. All applicable questions should be read and answered by the person applying for the insurance. READ the form or application before signing and dating it. If you have questions, ask the agent. If you cannot get a satisfactory answer to your question, it might be wise to avoid signing a document you don’t understand. Again, ask for copies for your reference and for your records; this avoids misunderstandings at a later date.
Be truthful and accurate in your replies to the questions asked, as they will be verified. Omitted or inaccurate answers will only cause delays or denial of coverage. If an agent makes an offer to you that sounds too good to be true, ask them to put it in writing and date it. If they refuse, it might be time to shop for another broker/agent. Don’t ask your broker/agent to break the rules, “just this once,” as you both could be prosecuted for fraud against an insurance company. Your professional agent is there to help you and has your best interests at heart.
Be an informed consumer and check with the Department of Insurance if you have questions about the insurance company your agent has recommended. Make certain that you have in writing, exactly what coverages you have purchased, the name of the insurance company, the amount of the deductibles (if any), policy exclusions, total premiums due, and when your coverage will take effect. You don’t want to experience an insurance claim at a time when you have no coverage in effect.