Tuesday, October 29, 2013

Why use a local insurance agent?

Many people think that having a local insurance agent means that you are paying more for the insurance or there are additional fees. While this can be true, it isn't always the case! Let me break down for you when you definitely aren't paying more and when you may be paying more.

Health Insurance:
It is actually against the law for any agent to charge a fee for signing up for health insurance. The agent is also, not allowed to increase the price. Therefore, whether you go directly to Kaiser Permanent, Blue Cross, or any other company verses going through an agent makes no difference as far as price. Now, if you do go through an agent, they may be able to give you additional service, representation, and sometimes even better information.

Dental Insurance:
Unlike health insurance, agents and brokers are allowed to charge additional start up fees for using their service. So, you often do save money by going directly to the dental insurance carrier. Now, this is not always the case. The main companies that add fees are online brokers that sell many different dental plans. A local agent would be allowed to charge a fee, but many of them don't. This is something they are required to inform you about, so you can always ask.

Car Insurance:
Auto insurance is definitely a mixed bag. If you go through what is called "an appointed agent" then you won't be charged "broker fees". If you use an independent insurance broker, you may be charged a broker fee. Common broker fees are $50 although some are more.

Home Insurance:
Homeowner's Insurance is rarely something you can get directly through a company without an agent. In large part this is because the home must be inspected and that requires a person to physically come to your home and often take pictures. Like car insurance, you may be charged a broker fee when going through an independent agent. This could be as low as $50 or I have personally seen as high as $250 for start up fees. It greatly depends on who you use and who will accept your particular home. In California in particular, homes are being scrutinized a lot due to high wild fire risk. If you are in a high brush area you will need a local agent to find a company that will accept your home since many companies will simply refuse you right off the bat. When you are in a high brush area you will almost assuredly need to use a broker who will then charge a fee, but that is probably your only option. I recommend checking various brokers and comparing their fee schedules. You can always ask what the fees will be in advance.

Commercial Insurance:
Insurance for businesses is similar to home insurance as far as brokerage fees. However, in addition to the concern about being in a high brush area, it greatly depends on what type of business you run. For example, a sandwich shop is a low risk and can probably get insurance just about anywhere. Therefore, they don't need a broker, they will still need a local agent, but they can avoid the extra start up costs that brokers usually charge. On the other hand, lets say you have a business manufacturing fireworks. This insurance policy will most likely only be available through an "outside carrier" or "non-admitted carrier". In which case, you will have to go through a broker, but again fees will vary depending on what brokerage you choose.

Santa Rosa Insurance Agency LLC:
We are a local Farmers Insurance Agency in Santa Rosa, California. When you purchase insurance from us, most of the time there is no broker fee. There are two exceptions to this rule. First, if we can't place the policy with Farmers or one of it's daughter companies we will put it with another carrier who may charge a $50 broker fee. Second, if this is the only policy we have for you and you have not been an existing client our office will charge $50 for the work of setting up the account and servicing the policy. We are always up front about any fees and how you may be able to avoid fees. In certain situations our office will pay the fees for you. This is primarily when you have multiple accounts with our agency or have been a longstanding client. Give us a call with any questions! 707-526-0448