I am consistently asked several questions by readers of this blog and current clients. Often the concern of one individual who asks a question is the concern of many others in the group who for whatever reason do not voice their question.
Early in my career I sat through many training meetings. What I learned is that there generally was a time for questions at the end of the meeting.
I also learned that there was a direct relationship between the number of questions in the group and my bladder. The more I had to go to the bathroom, the more the number of questions. I learned then that there is such a thing as a stupid question.
The question I was asked earlier this month is not of the stupid category.
Q. “Can I get rid of my health insurance broker?”
A. In a word, “Yes.” Before you get rid of him, however, stop and think through why you want to get rid of him. Read two previous posts before you make such a drastic decision.
In the past there was a technical difference between a broker and an agent. You would pay a broker directly, He/she was responsible to shop for you and find the best health insurance policy to meet your needs. Since you paid him a fee, it was illegal for him to receive a commission from the insurance company. He/she was required by law to look after your interests.
An agent is paid a commission from the insurance company for selling and servicing their policy. Since he is paid by the insurance company, he/she is required to look after their interests.
Today, the terms are often used interchangeably in casual conversation but once the accusations start flying, believe me, the technical definitions are still present. There are things that a broker is legally allowed to do that an agent is not. Before you do anything you will need to determine exactly what they are.
If you are wanting to “get rid” of a broker, it is relatively easy. Since you are paying him, all you have to do is terminate the contract you have with him. Just be advised that you may still be liable for his/her professional fees depending on the terms of the contract you signed.
If you are wanting to “get rid” of an agent, it may be a little more difficult since they are paid directly by the insurance company and not by you.
If you have not purchased anything it is very easy. All you have to do is pick up the phone and contact another insurance agent to help you. Before you buy anything your relationship with any insurance agent is exactly the same as with any other sales person. If you do not like the first sales person to approach you on the car lot, all you need to do is ask for another sales person or drive to the car dealership next door.
If you have already purchased an insurance policy and it has been in force for 10 days or more, your options are not as free. Your relationship is now with the insurance company and not with the insurance agent. Technically, the insurance agent is a sub-contractor of the insurance company. You have a right to expect that individual to be able to answer your questions and perform simple service requests. That is why he/she gets paid a renewal service commission each time you pay a premium.
Unfortunately, some agents only see themselves as sales people. They are your best friend until you purchase a plan and then disappear. You never hear from them again. In my opinion, those types of agents are not worthy of being called professionals or insurance agents. They are at best an insurance sales person.
Since you are not paying them directly, legally there is nothing you can do to them. If you are not receiving the level of local service you are looking for, there are a couple of options that are available to you.
AGENT OF RECORD
If you like the insurance company you have but feel that you are not getting the level of service you are looking for from your agent, you have the ability to contact your insurance company and request a change in your Agent of Record.
That would mean that you information would be taken from your original insurance agent and given to a different agent. Unless you know the new agent and specifically request that individual be assigned to you, you will have to accept whoever the insurance company assigns to you. You may be assigned to another insurance sales person who is just as lazy as the agent you are trying to get rid of.
Be advised that sometimes the insurance company’ hands are tied. Depending on the contract they have with their agents, they may or may not be able to change your “Agent of Record.” Some agent’s contracts stipulate that once they sell a policy their interests are 100% vested in that client. Insurance companies cannot switch those clients to a new agent without first obtaining the writing agents permission.
If you are in good health and your problem is not so much with the agent but with the insurance company, you have the right to change insurance companies any time you want. You do not have to wait until a policy anniversary to change.
If you use a different insurance agent your Agent of Record will automatically change with the new policy. You can also use this technique if your insurance company is unable to change your Agent of Record for contractual reasons.
If you do elect to change your insurance company, remember two things. First, although your new Agent of Record is able to help you with your new policy, he/she is unable to cancel your old health insurance policy. You will need to do that yourself.
Second, never cancel an existing insurance policy until after the new one has been issued and you have verified that it is satisfactory.
I am licensed to act both as a fee based Insurance Counselor in Texas and an insurance agent in Texas, Indiana and Michigan. If you have further questions on this call (832) 767-8059.
- How To Know If Your Insurance Agent Is Working For You Or Himself (theinsurancebarn.wordpress.com)
- Who Does Your Insurance Agent Work For? (theinsurancebarn.wordpress.com)