Terms and Definations
Broker
Also known as an Independent Agent, by definition, a broker is an employee of the
customer and not any one carrier orcompany. Even though a broker is required to
look out for everyone's best interest, the broker's first obligation is to the customer.
Typically, a broker has a broader choice of insurance programs from which to choose.
A broker makes an agreement with various insurance carriers to present their programs
to the customer. The more insurance agreements that a broker can acquire ultimately
means the broader price selection the broker has to offer, including down payment
and monthly payments. Most insurance carriers are careful with whom they make an
agreement. Therefore, the more agreements that a broker has actually acquired means
the better the reputation that broker has in the insurance industry. Michael &
Hege Insurance Services is one of these brokers.
Captive Agent
In most cases, an agent is captive. This means he or she offers insurance programs,
primarily from one insurance carrier. By definition, an agent is an employee of
that insurance carrier. Even though the agent is required to look out for everyone's
best interest, the agent's first obligation is to his or her employer, which is
the carrier. Because of the limited options available from just one carrier,
it usually means that it's either "all or nothing at all" when
it comes to selection and price.
Direct Carrier
Insurance that bypasses the agent or broker and sells insurance programs directly
to the customer. This is usually done by telemarketing or by directmail. Many of
these telemarketing representatives do not have a California insurance license,
particularly if they are located out of state. Also, directmail marketing can be
time consuming because you have to complete and mail a questionnaire in order to
receive a price. The perception created by using a direct carrier is that the commissions
saved when bypassing an agent or broker is passed along as a savings to the customer.
However, the prices offered by a direct carrier are readily beaten. Plus the direct
carrier suffers the same "all or nothing at all" limitations
that a captive agent does by having just one carrier as a resource.
HMO - Health Maintenance Organization
An HMO stands for Health Maintenance Organization. HMO's were the insurance companies'
original answer to increasing health care costs. The thinking was to cover wellness
visits, and focus on preventative measures to help control costs.
Learn more about HMO's
Independent Agent
Independent Agents work for you, and they are licensed professionals with strong
customer and community ties. Gives you excellent service and competitive prices
because your agent can access the insurance coverage from more than one company.
Unlike other agents, is not beholden to any one company; thus, you don't need to
change agencies as your insurance and service needs change. Assists you when you
have a claim. Is your consultant, working with you as you determine your needs.
Offers you a choice of insurance plans and programs. Is a value hunter who looks
after your pocketbook in finding the best combination of price, coverage and service.
Offers one-stop shopping for a full range of products-home, renters, auto, business,
life and health. Can periodically review your coverage to keep up with your changing
insurance needs. Treats you like a person, not just another number. Customer satisfaction
is the key to an independent agent's livelihood. So, serving you in your independent
agent's most-important concern.