When purchasing insurance, one of the more important decisions you will make is whether to work with a direct writer or to work with an insurance broker.
The biggest difference between the two is whether they represent just one company or multiple insurance providers. A direct writer is an insurance company whose own employees are licensed to sell insurance products directly to you. The employees of the direct writer work in the interest of the insurance company and can only sell the coverages and services of that single company.
Insurance brokers work for you, the client. They are your legal representative and an advocate for you with the goal of helping you to meet your insurance needs. After a transaction, the broker is typically paid a commission from the insurance company, but in the end, they are your agent.
Working with an insurance broker comes with many benefits:
- The broker is an independent, licensed professional who has access to multiple insurance companies in the marketplace. This access allows them to find the best insurance solutions available for your business.
- A broker can provide advice on your specific insurance needs and help address any changes in your coverage needs over time. They are there to help advise you on the suitable levels of coverage for your business and are equipped to help you understand the differences among the options you have available to you. They not only help you place your insurance with the best company to match your needs, but also help you manage your policy when you need to make changes.
- A broker can help you understand language in your insurance policies and ensure you’re following the conditions of your policy.
- You can build a valuable relationship with your broker. A broker is there to work for you and works with many companies to bring you the best products and services available. Conversely, many times with direct writers, you may be just another customer of the insurance company among many. You can find a broker in your area who has a genuine interest in getting to know you and what your particular business needs might be.
- A broker knows that you have many options when it comes to choosing your broker partner. With a direct writer, they already know you’re tied into the company, making you a captive audience. An independent broker will continue to stay engaged with you throughout your policy and values your relationship.
- The broker is also there to act as your advocate during the claims process. They can help you file the claim and act as your representative with the insurance company during this stressful time.
Because of the unique nature of the lumber industry and its specialized insurance needs, PLM could be mistaken for a direct writer when you consider our involvement with the lumber industry and the relationships we build with our customers. However, PLM works on an open brokerage basis, working with all licensed insurance brokers, and allowing our customers the complete freedom to choose the broker they want as their representative. We often refer to it as the PLM Triangular Relationship.
On top of that, PLM has Business Development Representatives throughout the country who work with our customers and brokers. They are local representatives available to further assist you and your broker through the insurance process. These individuals not only understand your business and the insurance business, they also understand the local industry and marketplace.
PLM has long valued the independent broker model because we feel that it serves as the best model for all parties involved, with checks and balances, for a mutually beneficial relationship for our customers, their brokers, and PLM.
