While shopping for insurance, you may look for options to purchase a policy. Also, you may receive various insurance quotes covering different insurance companies. Knowing the type of insurance agency you are dealing with may give you an ideal insight into whether you are attaining excellent value. Various types of insurance agencies include direct sellers, standard lines, and Surplus lines.
Surplus Lines
Regarding surplus lines insurance, the insurer is also called not-admitted or excess lines. Remember that surplus lines insurance agencies face less scrutiny than standard lines companies. They are not controlled or regulated by a state insurance body. They work under a state surplus lines office. Consequently, surplus line agencies are offered more flexibility with the kinds of insurance policies they deal with. However, remember that a state guaranty fund does not support these insurance agencies. This implies that the claim could only be settled if one agency shuts down. Learn more here.
Besides, surplus lines agencies do not offer the same services as standard lines agencies. They cover hurricanes, property in flood, an extremely old home, an earthquake, valuable racehorses, and a collection of rare art. Note that Surplus lines insurance agencies don’t deal in auto liability, health, or life insurance policies. Most significantly, remember that Surplus lines agencies tend to assume massive risks. Therefore, their policies are a bit costly compared to standard line insurers.
Direct Sellers Insurance Agencies
When dealing with a direct seller insurer, a client must buy a policy directly from the insurance company instead of a dependent agent or broker. Some direct sellers are operating local or physical offices. However, most of them sell their policies over the internet. Therefore, a client will be dealing directly with the insurance company instead of purchasing quotes, changing a policy, or buying a policy through independent brokers or agents.
The responsibility of dependent agents or agents is to sell policies for more than one company. In most occurrences, direct sellers’ insurance agencies deal with familiar brands of auto and home policies. These may include farmers, state farms, Liberty Mutual, GEICO, and Nationwide. Additionally, note that insurance agents who offer their services exclusively for a specific insurance company are known as captive brokers.
Standard Lines
Standard lines insurance agencies are licensed to operate and sell specific lines or insurance policies in a particular region. This type of insurance agency is also known as a preferred or an admitted carrier. Note that state insurance and state laws departments govern standard lines agencies. This may include the rates that these companies charge. When it comes to standard line agencies, they are required to contribute money to a state guaranty fund. This fund pays claims once an insurance agency becomes insolvent.
Remember that the insurance industry is filled with many challenges and lingo. Therefore, understanding the terminology that includes the various types of insurance agencies will enable you to make informed decisions when finding the right insurance agency. Learn more here by going through the whole article.
