Wholesale Insurance Companies Vs Retail Insurance Companies: Which Ones Are Best?

11:23 PM Jhon 0 Comments

If you’re looking for casualty or property insurance, it may be helpful to learn the difference between retail and wholesale insurance agencies. The difference in these two types of policies will determine the type of coverage you have, since there are different risk exposure regulations for retail insurance than there are for wholesale insurance.

Retail Insurance

The retail insurance market is made up of licensed professionals who create insurance policies underwritten by companies known as “admitted carriers.” If you’re looking for insurance, the usual process would be to contact your agent, who then finds a policy for you based on the insurance companies who are qualified to conduct business in your state. These insurance carriers are under strict supervision by the Department of Insurance for your state, and are licensed according to the state’s regulations.

Wholesale Insurance

If you have special coverage needs and aren’t able to find admitted carriers in your state because you don’t meet the risk guidelines, wholesale insurance may be the best option for you. For this type of insurance, the insurance producer will hire a broker or agent to find a carrier for you. The agent or broker, referred to as a surplus line producer or wholesaler, often has specialized capabilities when it comes to getting the policy that works for you. These professionals serve as the middleman between the retail insurance and the insurance carrier with the necessary resources. Wholesalers are required to have a surplus lines license, since they are in such a unique market. The insurance carrier in the wholesale insurance market are known as “non-admitted carriers,” and are usually not licensed by your state.

How Does the Wholesale Market Work?

Wholesale insurance gives you coverage for risks that are outside of the risk coverage for admitted carriers. It is possible to find wholesalers that specialize in specific areas like providing health plans for small businesses or administering benefits for employees. It is very rare that a wholesaler will have direct contact with you, unless you’re applying for the insurance needs that directly affect your business. The fact that wholesale insurance providers are not regulated by your state should not be cause for alarm. The rules for filing and reporting are simply different for wholesalers. Since these insurance professionals are not under the laws of your state, the pricing is more flexible. This ensures that you are covered even in the most unusual circumstances. However, it is still best to check the financial stability of the wholesaler you’re considering and to get customer reviews if possible, so you can find the company that is best for you.

Wholesale Insurance Products

Once you decide that wholesale insurance is right for you, you’ll have several products to choose from. There are high-risk products for damage from chemicals or a fire. There are also safety products pertaining to transportation, and structural integrity products to protect you if something goes wrong with the construction of your building. If you’re in the medical professional, wholesale insurance against medical or pharmaceutical product failure may be necessary. You can even purchase a privacy protection product to protect you from identity theft. Be sure to explain the nature of your business in detail to your provider to ensure you get the right products to help your business run smoothly.