Art and Insurance Series #5:

Ok, So Do I Go to My Local Insurance Agent?

I am asked many times what the difference is between an agent's office and a brokerage office. It is very important to understand what each is so that you know you are speaking with the correct person and firm. It can be very confusing from the start. Like what is the difference between an insurance broker, producer or agent? Which one do I go to? Brief descriptions of their responsibilities/roles in insurance follow:

• Insurance Producer/Broker:

  A Producer and a Broker tend to label themselves as one but not both. They basically are the same in the insurance industry; this person must have a license for the state that they do business in, after passing a state insurance examination. They are independent, meaning that they do not represent any single insurance company but as many as they choose to. There are many different categories of insurance (homeowners, automobile, construction, fine arts, etc). Producers/Brokers must be licensed for each category of insurance that they sell. The Producer /Broker must be appointed by at least one insurance carrier to transact business on the carrier's behalf. Producers are not limited as to how many insurance carriers they represent. The role of the producer is to match up the insurance carrier and the client to get the best policy for the client's needs. Basically a Producer/Broker works for the insured and represents the insured in the best way possible matching the insured up with the right policy for their needs.

• Insurance Agent:

  An agent is different from the Producer and Broker. An agent represents one particular insurance company. They can be under more than one insurance company. The agent also wants to find the best policy for the client; they only look to the companies that they are under.

While the titles are somewhat overlapping you need to know which one is the best to discuss your needs when it comes to fine arts. Since the Broker and the Producer often work independently for several insurance carriers this would be a good start. As with any business relationship, it is important to make sure that the Broker or Producer has a current license. Don't hesitate to contact the state insurance board to make sure the producer/broker/agent are indeed licensed and are conducting business as they should. Just about all state insurance boards have their own web site so you can confirm licensure in that state and if their license is current. Most states require a certain amount of continuing education credits in order to renew their license. In all areas of business there is a fair amount of fraud so it is important to check out the insurance person you will be discussing your needs with and who will direct you to the right policy with the best company.

If you currently have any type of property insurance (homeowner's, condominium, personal articles, tenant, etc.) then a starting place would be with your agent. Schedule a time (because your needs may take more time) to meet with your agent. The agent may be able to refer you to a Broker or Producer who handles fine arts. If not, then here are two suggestions: 1) ask other artists who they are going through, and 2) do a computer search. I never recommend a telephone book because you will not find anything about the Broker or Producer there. When you do a computer search, not only do you get the contact information of a Broker or Producer who handles fine arts insurance, you also can check to see if they have had a problem or kudos left by other clients. Caution: it is possible for a company to place their own positive comments under disguised names so don't rely solely on an initial search.

When meeting with a Broker or Producer for the first time, ask them for referrals. Remember, they are not interviewing you but you are interviewing them. Do not be afraid to ask questions. If there is hesitation in answers or, "I will have to get back with you on that one," then use caution. Remember, this is your business, your livelihood. It would be good to interview more than one to make sure that your needs/wants are important and not just your premium dollars. Interviewing several people for a position is very common in business when considering a new hire. Very few employers hire someone based on one interview. During your interview with a prospective Broker/Producer, some of the questions I recommend asking are:

• Is Fine Art insurance your primary line of business or is it secondary (on down)?
• How many years has the company been handling Fine Arts Insurance?
• Are you licensed to write a policy in all states? (If not, which ones)?
• What insurance companies are represented in your office?
• Are you able to write a policy specific to my needs?
• Will there be someone assigned to my account so I will have a contact person within your office?
• Do you have a claim representative in your office to assist with a claim should I ever need to file one?
• Does your office provide 24/7 contact should I need to file a claim?
• Do I have to go through your office to file a claim or can I file the claim with the insurance company direct?
• Does the insurance company have designated claim representatives for fine arts?

We are probably very familiar with the cutesy insurance commercials that are frequently run on television. Notice that they seem to have two major things they want us all to be aware of: nobody gives protection like they do; and, they are giving the best bang for the buck. That may work with auto insurance but it does nothing for fine arts insurance. Something that almost all the insurance commercials advertise is that they have the best prices. Do not hesitate to shop around. Do keep in mind though that sometimes you get what you pay for and what you are getting may not be what you need. So, don't just look at the price tag.

Since fine arts insurance is so specialized, look to an insurance professional who also specializes. It isn't about what they can do for the insurance company, it's about what they can do for you, the artist, the gallery, the dealer, anyone who connects with the art world. While there are some awesome insurance agents in the industry, they may not offer you the best product within the industry.

Art and Insurance Series

Shaunda Clifton, fine art claims adjuster and writer, will be contributing a series of articles on insurance and the artist for Fine Art Registry. Read the first article in the series, and look for future articles on the following subjects:

• Art and Insurance Series #1
  I Filed My Claim, Now Where's My Money?
• Art and Insurance Series #2
  Insurance - What the Heck Does That Have to Do with Me?
• Art and Insurance Series #3
  Five Reasons Why Artists Need Insurance
• Art and Insurance Series #4
  Insurance is Not "One Size Fits All"
• Art and Insurance Series #5
  OK, So Do I Go to My Local Agent?

— by Shaunda Clifton  |  February 1, 2010

Print   |  

back to top