Home > Where to Obtain Coverage There are three main channels of property and casualty insurance: Captive Agents, Independent Agents, and Direct Marketing. Independent Agent - These agents often represent several insurance companies with which they have formed an agreement in order to become authorized to broker the given company's insurance policies. One of these agents must hold a license from the department of insurance in the state of business. Also, the insurance companies must normally file a notice of appointment with the department of insurance in that state for every independent agent that they designate. In most cases, the independent agent gets paid to broker insurance policies through a commission based pay structure. For each policy that they sell, the agent gets a specified commission. The advantage to using an independent agent is often considered to be their ability to obtain insurance quotes from more than one insurance company, which permits a greater assortment of choices for the consumer, through comparison. Professional and trade organizations that exist specifically for independent insurance agents are the PIA (Professional Insurance Agents) and the IIA (Independent Insurance Agents) organizations. Captive Agents - These agents represent only one insurance company, often working as a direct employee of that company. Captive agents are limited to offering only those policies that are made available by that company. This marketing arrangement has been successful and can be seen reflected in the prominence of some of the major insurance companies and the substantial market share that they control. In this case, it is obviously more difficult for the shopper to compare prices and policy details among the various captive agent companies, due to the need to contact them separately. Some factors that can be considered when choosing an agent are education, experience, pro organizations, and CPCU designation (Chartered Property Casualty Underwriter), which is a symbol of career accomplishment in the insurance field. Direct Writers - These brokers generally conduct business through toll-free telephone numbers or internet based systems. They often use direct mail ads and television ads in order to expose their product to consumers. A special emphasis is placed on lower pricing of coverage in order to stimulate buyer interest. In the absence of an agent, these brokers have the potential to offer less or inadequate counsel and advice regarding details such as policy limits and terms and conditions. Regardless of the lack of agent interaction associated with direct marketed insurance, these policies are still subject to compliance of the same minimum state requirements and guidelines for insurance plans. Broker Status Insurance brokers can be considered either admitted or nonadmitted by each state. An admitted broker is also called a standard lines broker. A nonadmitted broker is also called a surplus lines broker. The difference lies in the relative protection afforded to admitted brokers, due to each state's insurance guarantee fund. Admitted brokers can guarantee the payment of a claim to a policyholder, even in the event of broker insolvency. An admitted broker's policy is guaranteed up to the limit of that state's insurance guarantee fund. This means that if a claim is made against you after your insurer has become insolvent, you still have the legal capacity to obtain coverage for that claim. In the case of nonadmitted brokers, they are not covered by each state's insurance guarantee fund, meaning that if they become insolvent, then there is no guaranty that a policy holder's claim will be awarded. If a nonadmitted insurer becomes insolvent, then the policy becomes worthless. FAIR - Fair Access to Insurance Requirements Many states have these requirements. Member insurers must participate by accepting consumers who qualify for an assigned risk plan. The consumer has reached this status due to having been denied coverage a certain number of times by other insurers. The consumer is presented with an insurer who must issue them a policy. In this way coverage from an admitted broker is assured, although rates are usually more expensive. These programs are for high risk individuals, properties, or geographical areas that normally have a difficult time getting coverage.