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  1. #1
    Member
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    Jan 2008
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    839

    Captive Agents, Brokers and 1-800 Companies - An Insurance Overview

    Guys,

    I have been a member of this board for a little less than a year, I was directed to this board by my boat salesman when I was in the market for a new bass boat. I appreciate all the comraderie, compassion and friendships this forum & Al allow us all to have that we would not have otherwise. (The Internet is an amazing invention!) That being said, I plan to offer my help on this string as my time permits (I usually log on daily) and provide my knowledge to those of you who may be an expert plumber, mechanic, or air force pilot but nothing of the sort when it comes to insurance and its related coverages.

    As for my qualifications and background, my extended family has been in the insurance business for over 50 years. I personally own 2 large insurance agencies for a well-known company in the state of Illinois (that sometimes gets verbally bashed on the BBC) . I have been in the industry for 19 years. My father, 2 younger brothers, brother-in-law, and multiple uncles/aunts and cousins all are in "the business". My family started, owned and ran the largest independent insurance agency in the Midwest - we sold and serviced policies for over 65 different companies throughout the U.S. (until it was decided to sell roughly 5 years ago). I also own three boats...one of which is a 08 Bass Cat Sabre FTD.

    I have seen the industry from a variety of departments: customer service, claims/adjusting, underwriting, rating, marketing and sales.

    The industry itself is ever-changing. There is no way to know EVERYTHING as the companies, their underwriting policies, coverage and claims handling tends to change - almost daily sometimes - in response to the marketplace, economy, natural disasters, and finally the companies bottom line revolving around their profit.

    What I will offer to you guys here is a short synopsis and MY OPINION on different kinds of "agents" and companies, a basic description of each and some pointers on what to look for in an agent/broker and lastly, some advice.

    CAPTIVE AGENTS:
    are agents (like myself) that work for and/or are employed by one company that are only able to place their insureds (customers) with that ONE company they reperesent ONLY. Everyone you deal with (Agent, Claims Rep, Adjuster, Customer Service Rep) is associated with and works for that company - they tend to be more customer centric because of this: Companies like State Farm, Country Companies, Allstate, Farmers, and American Family have captive agents.

    BROKERS/ BROKER AGENTS:
    are employees or agents who work for an "agency". These can be along the lines of an ABC Insurance Group, USA Insurance Agency, Insure One - or for those of you in the Illinois/Indiana area probably have seen the goofy commercials for Eagle Insurance ("Wow! Look at those low rates!" -As a large fake bird lays an egg, which cracks open to reveal a rate sheet based on the drivers age). Brokers generally do not advertise a single company they write or place business with. Rather often, they offer quick ID Cards and "SR22" or what's known as "financial repsonsibility filings" (these usually are the result of a driver's license suspension that the state requires you to provide them with continual proof of coverage). Brokers can sell for multiple companies. Generally the more business they write, the more contracts they can get with additional companies to write business for them as well. Some well-known "preferred" companies that are usually sold through brokers are Progressive, SafeCo, Travelers, and Pekin.

    1-800 COMPANIES:
    These are easy to describe as most of you know of/have heard of Geico & e-surance, and seen their commercials. They do not have agents, just "insurance professionals" or customer service representitives that handle your policy. Unlike Captive Agents and Brokers, they have no "personal interest" (compensation) tied to your policy, whether or not your happy, you cancel your policy, etc. They are generally paid a hourly salary based on being at a call center and either providing quote comparisions and/or handling current customer service issues: policy changes, answering questions or forwarding a person to claims.

    For starters, I honestly believe having an agent is an absolute must have. But, as a footnote to that, not all agents are created equal - there are inexperienced and unethical agents out there.

    I personally would choose a captive agent (with a large well known company) or a large well-known broker that has been in business a number of years. Granted, some may call me biased being that I am an agent - but having seen and spoke to people the industry for a large number of years, I stand by that statement. Now don't get me wrong - not ALL agents are good, just like all companies are not good. You can have an agent provide you with outstanding service and coverage, only to find the company the coverage is provided by and the way they handle your claim is not worth the paper the policy is printed on. I think agent experience goes a long way, and an agent that listens to and answers your questions is something to look for. Also, an agent that if he/she does not know the answer to a question, tells you they do not BUT finds out the answer for you is important quality as well. No two customers/insureds are the same - everyone has different needs and it is important as an agent to tailor a policy to fit the individual and their coverage needs. One that sells you a "cookie cutter" policy because "everyone else carries those limits/coverages" should raise a red flag...your agent should ask you some personal, probing questions about what you do, and what is important to you when it comes to recommended policy coverages. A good agent will often times offer additional riders/coverage in case you have a need for them and also suggest different limits and some info as to why it may be a good idea to carry it. If your agent doesn't tell inform you a coverage is available to you, and it happend to be something you would need or want how would you find out? Unfortunately, when you need to make a claim on something that the extra coverage would have provided coverage for, but instead - since your agent didn't tell you about it, you find out it IS NOT covered.

    Captive Agents generally have the most pull/influence (but not always) when it comes to saving an insured from being cancelled, intervening when a claim is not handled to the satisfaction of the customer, and assisting the insured when problems arise. They are working with underwriters, and claim persons who all work for the same company. Some companies nowadays, the agents have less ability to get things done for a customer, instead there are guidelines in place as to when a customer's policy will get non-renewed, etc. but for the most part they do not get paid unless you are their customer so they tend to be more customer-centric in their efforts to keep you happy and satisfied.

    Brokers can be just as good (and sometimes better) than Captive Agents as they have the ability to move a customer from one company to another for a variety of reasons: cancellation, a cheaper rate than what you may be currently paying with another company they write business for, being a couple. But, most have little to no pull when it comes to intervening on your behalf if you have problems with a claim or coverage. Most refer you to the 1-800 number or "transfer you" to the company directly and then you deal with a customer service rep at the company (who I remind you has no $$ incentive to keep you happy). This is the biggest drawback to dealing with a broker. You want to help and assist your customer but your hands are tied as you simply place customers with the best company at the best price for the insured when you write their business. Brokers at their worst, sometimes can place you with a more expensive company than another company they offer or a "high-risk" company that provides terrible claim service - simply to meet required sales goals or bonuses/commissions that company provides to them.

    As for 1-800 companies, I personally would never insure anything I own with them. You have no representation of YOUR interests there. Everyone that you deal with has no incentive to try and keep you happy, or assist you - that's not to say that you won't find someone that is helpful and knowledgeable - but most likely they have little to no experience in the field, and are basically there to collect a check. Most offer quick policy coverage, and cheap rates - but the reality is when it comes to covering claims (what you're paying for) most leave you short-changed.

    Some things I would put out there to all of you that frequent this board and are looking for advice on insurance...

    First and foremost, I always tell my customers <U>"good insurance isn't cheap and cheap insurance isn't good". </U>Now there are times when my companies policy and its price are the cheapest in the area - but that's most often not the case. But, when you have the need to file a claim you will have a better experience, hopefully be completely satisfied with the outcome and how professionally & quickly the claim was handled.

    The "high-risk" companies, these are companies that most of you do not know the difference between, but those of us in the industry know of as companies that frequently have a large number of customer complaints with the state Department of Insurance and Better Business Bureau. They offer bare bones coverage at rock bottom prices...they are great so long as they get your monthly payment and you do not have to file a claim. But, you buy insurance for CLAIMS and when you actually need to use your coverage to file one - that's when you find out what you have been paying for!!! So, when you go to file a claim with one of these "high risk" insurance companies - it tends to feel like pulling teeth: trying to get someone to call you back, schedule a time for someone to come out and take a look at your damage, and lastly and most importantly - deal fairly with you when cutting a check for that damage.

    I find it disheartning when I see some of you posting on the BBC about bad experiences with company A or B...but I also know you need to be dilligent in asking about coverage, how it works, what is not covered - don't be afraid to ask questions and talk to your agent. Most people do not know what is covered (or if it is covered) until the moment they pick up the phone to call in a claim!<U></U> Then when they find out something is not covered, or not covered to their liking they complain about that company, their agent, etc to anyone that will listen. Some agents admittedly drop the ball, some are inexperienced - but often times the customer just doesn't understand how the policies work and provide coverage.

    I would suggest buying a policy from somebody that has knowledge in the specific area you need insurance for like RV's, motorcycles, etc. For instance, buy a boat insurance policy from an agent that boats and owns a boat him/herself. (this is in NO way a solicitation, either) But, most likely, they will be well-versed on the best & most complete coverage for boats because they insure their own, and they will tend to suggest "riders": (coverage that is not automatically added unless you pay extra for it) and extra coverage to you that you may not be aware of and in general provide you with a better experience and more complete coverage because of it.

    I tell my customers that "I treat people how I wish to be treated" - the Golden Rule. I look at my job as having a responsibility to explain and educate my customers both during sale of a policy but also during the time they may consider filing a claim. I try to explain the ramifications of filing a claim as to how it may affect the policy, its discounts and the price if they choose to do so. But most importantly, I am my customers advocate - being the person they pay (through the premiums they pay) to get things done for them.

    When choosing an agent (for anything: home, auto, boat, RV, life, business) make sure it's somebody that you feel comfortable talking to, that you feel will go "to bat" for you when assistance is needed and most importantly suggests coverage and updates you on changes in the marketplace that may affect how your policy affords you coverage.

    Lastly, please note this info comes from my many years and experiences with ALL of the above type of companies and "agents". I welcome any other insurance agents/owners who have something to add to this, or feel that one or more of my opinions is off base to chime in. Again, this is not the end all be all when it comes to insurance simply my suggestions...but hopefully it enlightens and educates some of you!

    Hope this helps you all.


  2.  
  3. Member
    Join Date
    Jun 2006
    Location
    Mercersburg
    Posts
    308
    #2

    Re: Captive Agents, Brokers and 1-800 Companies - A ... (Halls1030)

    Halls, thanks for all the info. I really feel that having you and the moderator on here is going to educate a lot of us. Thanks for taking your time to write in.


    Happy New Year


  4. Member
    Join Date
    Nov 2008
    Location
    Athens
    Posts
    10
    #3

    Re: Captive Agents, Brokers and 1-800 Companies - A ... (JB Fire)

    Halls,
    Nicely put that is right on the money, I too am a captive agent possibly with the same Illinois company you are refering too.

  5. Member
    Join Date
    May 2007
    Location
    Osteen
    Posts
    354
    #4
    Appreciate the write up as I prepare to look into insurance for a boat. But I am curious to the experience(which you state you have with ALL types of companies)....

    I have had the lizard(Geico) on my cars since 2001 or so. When I first got a license I got on with my parents AllState plan in the early 90s and soon discovered it wasnt that great either(file a claim, rates go way up anyhow, I got a few tickets and if I didnt get off the policy they were going to cancel the entire family). Im not sure what that personal interaction and vested intrest their agent had in making sure we were satisfied did for us..
    After that I went to a broker, who served me fine through the remainder of the 90s. But since I moved away, I had to look elsewhere and was busy so I just called Geico...
    Personally I couldnt be happier. Any issue I ever had they took care of right away. I have yet to file a claim with them though, but thats experience that Im glad to say I dont have to report on. I can manage my account myself, get documents in minutes any time of day, rates are fine, etc.
    I was happy enough with them that over time they have my cars(I think i have 5 on the plan), motorcycle, previous rental house, and now my homeowners insurance.

    Now, although I do not have experience with claims with Geico, I do have it with Progressive. 6 months ago one of their insured clipped the back end of my wagon. Within a week I had a check in hand that more than covered the repairs. They asked if I needed a rental, I declined since i have other vehicles and its just wasteful. But again, no complaints with these 1800 companies that have no vested interest...

    As a side, my mom recently retired from a large insurance company based out of central IL..... While other companies may also give you a rude awakening of whats covered when you file a claim, this particular company was no exception. She handled issues all day long of people with full coverage on vehicles complaining about how it was devalued so far that it wasnt even street value, but crackhead values.

    So Im not intending to bash a very informative post, only to mention that I do feel that your representation of the 1800 companies is a bit skewed, and if notthing else almost the complete opposite of everything this board member has experienced.


    ----------------
    Scott
    1988 Skeeter SK2000
    Become a Pro at Fiberglass Repair... Buy a Skeeter!!

  6. #5

    Re: (boostedone)

    A little input on insurance. I own a heating and air cond. company, sometimes my company does not do all it could for my customers,first off i fight like hell for customers, then it may come somewhat out of my pocket, but they are generally left happy.I just had a claim with allstate, my first, had a guy hit my nitro boat and thot it was funny, I did not, I called him a stupid sob, which he deserved, he paid me back in the nite, at least I think it was him, my boat was the only one damaged.
    damage to my boat was 4100.00.Called my agent, no problem, he said it would be taken care of. I then decided to buy another boat, did, priced mine to a guy, knocked off about 3500 because of vandalism.Allstate then told me they wouldnt pay unless I fixed boat, they gave me a check on the truck, also damaged.But on boat,deducted at least I think about 2000, not sure because it has been 5 damned weeks and still no check, I stand to lose about 2000 bucks.My agent said just paint the truck and jack the guy up 4100.00 and get my money back, I said I have already priced it, no problem he said, just get it fixed and jack it up 4,000. I do not live in this guys world.I said, you mean I can sell you a car for 100.00 and then paint it and just jack it up a few thousand and you will pay me, that is different he said. To make matters worse, I went to their recommended shop and they sent 2 estimates, one on truck, one on car, confused the lady adjuster, sent another adjuster, all was well on the estimates, but then I found out the lady basically accused me of insurance fraud, the sec. at my agents office said she knew me and that absolutely did not happen. So, here I am, gonna lose about 2 to 2500 bucks and I should be happy with a captive agent, I am probably gonna go to geico, or someone, and in In. a boat is insured more like a home than a vehicle, if your house burns down and you do not rebuild to what they want, you are gonna be like me on the boat, screwed, and I dont like that.I told my captive agent that if I had another claim he had forced me to pad it and he went thru the roof, I guess his sense of humor was tilted that day. But, as I reflect, I am sure I can afford to lose 2-2500 easier than state farm can, after all, insurance companies only own about all that china doesnt own in America today, thanks for letting me vent, alan

  7. BBC SPONSOR
    Join Date
    Oct 2008
    Location
    Portland
    Posts
    749
    #6

    Re: (altheguide)

    I have tried to explain to the members here on marine insurance. It is very important to understand your coverage's. It is really very simple. If you bought a $100,000 classic car would you call someone who sells health insurance. I educate my clients on all the coverage's. I hope things work out for you. Bob

  8. Member
    Join Date
    Mar 2005
    Location
    Boise City
    Posts
    1,332
    #7
    Your insurance company owes for the damage to your boat no matter if it is repaired or not. They may cancel if you do not repair it but they have to pay for the damage. I expect there are several of us on this board that have a lot of experience in the insurance business.
    Flyboy

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