Take a look at the items in your budget this last month which required you to spend money. I looked at mine and found premium payments for my wife’s and my health insurance, dental insurance, life insurance, auto insurance, and homeowner insurance. If I were to add them up I’m sure I would discover over 40% of my take home pay was allocated to those insurance coverages. In addition to those expenditures I presently pay, when I was working I paid for professional liability, E&O coverages, disability insurance, office and equipment coverages, and key man insurance coverages. When I added all those with other professional insurance coverages along with my personal insurance premiums, I was well over 50% of my gross pay.
I had the advantage with my employment as an insurance agent to be somewhat familiar with all the types of insurance mentioned above, and yet I still needed advice to interpret some of those insurance requirements. Since you are or will incur some if not more of those costs, how do you know if you are covering all your bases adequately? Finding a competent insurance agent may be the first place you might want to begin in your quest.
First acknowledge to yourself that the internet may not hold all the answers to your insurance needs. It may be a place to obtain insurance information, but it may not hold enough detail to satisfy your needs. The savings of a few dollars by shopping online pales in value when you are in need of assistance when a claims is incurred and you don’t know where to turn. The time when coverage is required is not the time to investigate your policy to see if in fact everything is in force.
With my 42 years of selling insurance as my veranda, let me share with you a few ideas I feel are worth considering when you are choosing an agent.
1. Find an agent who is competent in your field of interest
You may need to have more than one agent involved in your venture into purchasing insurance. Some agents are well informed in certain areas while not so well informed in others. For example, I stopped marketing health insurance approximately 10 years ago due to the ever-changing landscape of the marketplace. I even sought out an individual who I knew was making it her priority to remain abreast of those changes, and had her handle our health insurance. It doesn’t take long, with a little investigating on your part, to find such an individual. Because she has specialized, she does not get overwhelmed with so many insurance issues on her plate. Ask your present agents how they feel about their expertise and then ask if there is someone else they could recommend who may be more knowledgeable in certain areas for you to turn to. It may very well be that your present agent is very competent and can assist you. If they are professional at all, they will not feel offended because you want a “second opinion.” Find an agent who is competent in your field of interest.
2. Check the Word on the Street
A second suggestion would be what is the “word on the street.” Ask people you know who have some of the same insurance needs as you who they do business with. How are they treated by that professional? Do they feel comfortable with the agent’s business practices and personal conduct. Does your friend feel they are respected by that agent even when they ask the same question again and again when the explanation isn’t clear. At your next church social, ball game, social hour, or kid’s concert bring up the subject you may be interested in. Weird thing, if you sell insurance and bring it up, it is amazing how quickly you are left standing alone; but, if you aren’t selling, it becomes a pretty good ice breaker topic. Most people do have some feeling toward their insurance providers, and it doesn’t have to be an hour’s discussion to find that out. You could come away from that social interaction with the names of a couple or more prospective agents.
3. If Possible Meet Your Agent in Person
A third suggestion–go eyeball the prospective agent. How involved you want that agent to be in your life is one of the overriding reasons for sitting down with him or her and talking about their philosophy of agent/client relationship. Don’t be in too big a hurry to move into the buying phase of this relationship. I always felt it was an honor to have someone quiz me as to why I left city government employment to sell insurance. I had an office partner who went to the extent of providing each of his prospective clients with his own “commercial” which gave them a lot of detail as to his background, his hobbies, his civic involvement, his family, and insurance industry experience. You hear a lot about saving money with just a ten minute call, but I would suggest those same ten minutes in front of a prospective agent may save you not only money but also save stress down the road when you need professional assistance.
Would you want this agent privy to your most confidential information? Would you want this individual to be in your home discussing life insurance death benefits upon your passing? Would you want this individual to be with you in figuring out how to negotiate a downturn in your financial fortunes? What about helping you determine the types of insurance you need when you are starting a business? I once heard it said your insurance agent is your highest paid non-employee on the job. Make sure it is someone worthy of that distinction.
4. Check with the Department of Insurance
Going along with the third suggestion would be the fourth of checking the reputation of the agent by calling the Department of Insurance and asking them about the good things and the bad things which may be on the agent’s record. All correspondence received by the insurance commissioner’s office is public record so it is easily accessed. My experience has been that when a complaint has been filed against an agent, the commissioner’s office tries to get both sides of the story so the agent doesn’t get black balled unfairly.
5. Check on the Company (Especially for Smaller Agencies)
A fifth suggestion would be checking again with the Department of Insurance for the history of the insurance company or companies the agent represents. How financially strong are they? Do they have sufficient assets to cover anticipated losses? Do they pay their losses in a timely manner? Are their marketing practices above reproach? Does the company put the interest of the client first? It doesn’t speak highly of integrity of the insurance company whose philosophy is to get into the marketplace while it is profitable and then pull out when it appears a period of profitability is coming to a close.
6. Find Out How Efficient They Are in Managing Policies
Checking how is the office staff trained in their office procedures and contact with the public would be a sixth suggestion. With the fast pace of business now, it is not always possible to meet with your agent on a daily basis. Are simple changes handled efficiently, i.e. changing vehicles, notifying lienholders of coverages, billing mortgage holders correctly, routing claims to appropriate departments, and notifying you of renewal dates, etc.
7. Do they Communicate Regularly Regarding Insurance Coverages and Renewals?
With time flying by so fast does the insurance agent and office keep you informed of renewal dates so you have the opportunity to meet on at least a yearly basis to review your insurance coverages? In the past, people would buy homeowner insurance and never review it. With inflation and market values being so volatile, it doesn’t take long for coverages to become inadequate. There are policy guidelines which have to be met in order for claims to be handled properly. Case in point, are you aware of the 80% coinsurance requirement in order for your policy to pay replacement rather than actual cash value?
8. Check the Plaques on the Wall
Check the plaques on your agent’s wall and see how many of them are for sales volume and how many of them represent an ongoing educational commitment. These plaques may give you an idea of the competence of your agent. My impression is those who have sales recognition are also the ones who are keeping pace with the changes in the industry. You’re fortunate to find someone who does have pride in their sales success along with the commitment to stay up to date on industry changes.
9. Find Someone Who Doesn’t Claim to Know it All
Find someone who is willing to admit they don’t know the answer to a question but will spend the time to find out. It is extremely frustrating to have someone just guess, leaving you vulnerable to error or false information. Most consumers can live with and forgive honest mistakes, but it is difficult to have to bear the agony and sometimes financial loss brought on by someone’s not being competent.
10. Find an Agent of Integrity
Last in my list of ten suggestions is the one of most importance to me. Is the potential agent a person of integrity? Does the individual have a code of conduct which embraces the golden rule? Will he or she treat you like they would like their mother treated? Will they go out of their way to insure you receive the best service possible? Will he or she through deed and action earn the right to be your agent?
Hope these few suggestions can help you so your hard-earned money can give you maximum returns in the insurance arena. Good luck on finding a personal agent for each of your insurance needs.