Insurance Brokers vs. Captive Agents

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Agents and brokers act as intermediaries between you (the insurance buyer) and your insurers. Each has a legal duty to help you obtain appropriate coverage at a reasonable price. Each must have a license to distribute the type of insurance he or she is selling. An agent or broker must also adhere to the regulations enforced by your state insurance department.

The main difference between a broker and an agent has to do with whom they represent. An agent represents the insurance company. He or she acts as an extension of the insurer. A broker, on the other hand, represents the insurance buyer.

Captive agents charge all of the costs of insurance in one price. For example if you pay $1,000 that will include the cost of insurance and commissions for the agent. Captive Agents (State Farm, Farmers, etc) sell policies from their parent company. These agents do not reveal their commissions but they do have to earn a living and that is being paid for their work.

Insurance Brokers pay a wholesale price for a policy. For example the wholesale price might be $750 then add on commissions ($250) making it $1,000 total. All broker fees have to be disclosed and approved by the customer. Because insurance brokers can shop multiple insurers, brokers can most often find the most competitive price for insurance. Also Brokers can find insurance for customers who are hard-to-insure.

When you go to the ice cream shop they don't just sell vanilla. Most ice cream shops have dozens of flavors with dozens of toppings available. This is the same as CBW Insurance Agency. Do yourself a flavor, call us today.

7800 University Ave, La Mesa California