2012 Consumer Guide to Automobile Insurance
Role of Agent, Broker or Company Representative
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: See Chapter XVI for more information on Shopping For Auto Insurance.
Insurance agents and brokers must pass licensing examinations given by the 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 which that broker has a contractual relationship. 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 coverages, 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 $50 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.
We always encourage consumers to shop around for auto insurance to obtain the best available coverage and service at the most reasonable price. Contact several agents, brokers or insurers when shopping for auto insurance. Sometimes the best way to find a qualified agent, broker or company sales representative is a referral from a satisfied relative, friend or neighbor. But remember that some insurance brokers may not have auto insurance markets outside the 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 insurer's underwriting guidelines.