how to choose an insurance agent
Finding an agent that is right for you is essential to finding cheap
insurance. An effective agent will protect your interests when helping
you select coverage and will stay in contact with you after you
purchase your policy to make sure your coverages and policy limits
are sufficient to meet your changing needs.
TYPES OF INSURANCE AGENTS
There are three main types of agents that can help you evaluate and
select insurance coverage and meet your individualized needs:
independent agents, captive agents, and direct writers.
An independent agent is a licensed insurance provider that is not
contractually obligated to write insurance solely for any one company
or its affiliates. Instead, this type of agent is free to provide insurance
quotes and bind coverage for several different companies. For this
reason, independents can help you shop for insurance available
through a variety of different companies without requiring you to
submit multiple applications or travel to several different places. This
is advantageous to you when seeking cheap insurance because the
agent can provide you with several different quotes from competing
insurance companies and help you evaluate each quote to determine
which policy is best for you and your family.
In addition to helping you compare insurance quotes, an independent
agent can also explain various coverage types and plans and make
sure you are quoted for the specific limits and plans right for your
needs. This saves you the time of having to call several different
companies and compare each quote to make sure you are quoted for
the same plans and limits by each company.
An independent agent is required to meet all the necessary licensing
criteria set by your state's insurance laws, including pre-licensure
classes, examinations, and continuing education classes. They are
also required to follow the laws of each state in which they write
Just like an independent agent, a captive agent is required to meet
the licensing criteria of each state in which he or she writes insurance
business and comply with the laws set forth by the state.
The main difference between a captive agent and an independent
agent is that a captive agent has agreed to an exclusive contract with
one insurance company and can quote insurance only for that
company and its affiliates. A captive agent can discuss coverage
limits and different policy plans with you but is limited to providing
quotes for a single insurance company or affiliated group of
The principal advantage of using a captive agent is he or she will
likely have intimate knowledge of the products of the company or
group he or she represents, so you will receive more thorough
explanations of coverages and policy limitations than you would with
an independent agent, who must be familiar with the policies,
coverages, and insurance programs of a number of different insurers.
Direct writer agents can be reached by choosing an insurance
company and calling the company directly instead of searching for an
independent or captive local agent. Direct writer agents are often
employed by the company they work for and are not employees of a
local agency. They will be able to provide you with coverage
information and quotes for insurance programs offered only by their
employer or its affiliate companies. A direct writer agent is also
required to meet all the licensing criteria and follow the laws of the
state he or she writes insurance in.
One advantage of using a direct writer agent is that he or she can
often provide services over the phone, fax, and mail. This includes
providing initial policy premium quotes, binding insurance coverage,
taking premium payments, and assisting you with making changes to
your insurance policy. In contrast, many captive and independent
agents will ask you to come into their office to review the coverage
and sign the paperwork, or they will ask to schedule time to come to
your home to discuss insurance plans.
The primary disadvantage of using a direct writer agent is that direct
writer companies sometimes experience high employee turnover, so
you may find yourself working with a different agent, or a customer
service representative, when you call back to make changes to your
policy or make premium payments. It is important to weigh the
convenience of handling your insurance needs via telephone, e-mail,
or fax against your need for an insurance agent that will be there to
service your policy for years to come.
WHAT TO REMEMBER WHEN CHOOSING AN AGENT
Regardless of which type of agent you choose, the most important
thing to consider when choosing an agent is your personal comfort
level with the person. You will not want to give your insurance
business to an agent that does not set you at ease and demonstrate
he or she has your best interests in mind. Here are some questions to
ask yourself when choosing an agent:
• Does he or she seem knowledgeable? A knowledgeable agent
should be able to answer any question you have, provide quick
and accurate premium quotes on coverages and policies, and
explain each coverage, provision, limitation, and exclusion.
• Does the agent explain concepts in a clear manner that you can
easily understand? Because insurance agents have taken
licensure classes and have passed the necessary tests to be
licensed agents, they understand far more about insurance than
the average person. Also, there is a certain degree of insurance
jargon used between agents and agency staff that can be
confusing if you are new to personal insurance. A good agent
should be able to minimize the use of insurance jargon and
explain things in a manner customers can understand. It should
not be necessary for you to get an insurance license to
understand what your agent is saying to you.
• Does he or she seem willing to find answers to your questions,
even if he or she does not have an immediate answer?
Insurance agents, while knowledgeable, do not know the answer
to every question, but they should have the resources available
to find the answer. If an agent cannot answer your question, he
or she should show willingness to research insurance
publications and materials or contact an underwriter representing
the company providing your insurance policy to find the answer
• Do you feel confident the agent is going to be able to handle your
policy or policies with your best interests in mind? This requires
a certain amount of trusting your own instincts because it can be
difficult to objectively answer this question after meeting or
speaking to your agent only once or twice. If you are not
comfortable with the agent you are working with or do not feel he
or she is competent to handle your policy or policies, it may be
time to shop for a different agent.
Some agencies are bigger than others. Often, larger agencies will
have a customer service staff available to make policy changes,
address policy questions, and answer billing questions. Any agency
staff member that makes policy changes or answers policy questions
should be licensed as an insurance agent for the line of insurance
your policy falls under.
In some cases, you will be working with the agency staff more than
you will the agent you started the policy with. This depends on the
size of the agency, the volume of business the agency handles, and
how aggressively the agency is seeking new business. Here are
some questions to ask yourself when you meet the agency's
customer service staff:
• Was I greeted quickly and in a friendly manner? Agencies can be
busy, but it is important an agency staff is efficient and friendly.
• Does the licensed agency staff seem willing to answer
questions? Just like the agent who wrote your policies, agency
staff members may not know the answer to every question.
However, like your agent, they should demonstrate willingness to
find the answer.
• Are phone messages returned in a timely manner? Few things
can be more frustrating than leaving message after message
and not receiving a return call. If you call in the morning or early
afternoon, you should expect to have your call returned within
the same business day. If you call late in the afternoon, your call
should be returned before noon the next day.
An agency with a courteous, efficient, and helpful staff can be
valuable to you because you will spend less time worrying about your
insurance coverage and more time focusing on your work, family, and
Many agents offer an annual or renewal review. During this review,
the agent can review your policy to make sure you are receiving all
the necessary coverage. Do not view this as a waste of time or an
intrusion - insurance agents understand that, when circumstances in
your life change, it is easy to forget that these changes may affect the
insurance coverage necessary to protect you and your family.
When you go to your review, you should let your agent know of any
life changes, such as a job change, marriage, the birth of a child,
retirement, or change of your physical address. Any of these events
can create the need for coverage changes or additional polices. For
example, some companies give a savings on auto policies if the
policyholder is married.
If your agent does not mention an annual or renewal review, ask if the
agency currently does periodic reviews. If the agency does not,
request a meeting with your agent to go over the coverages annually.
If an accident or loss occurs, an insurance agent is the first person
most policyholders contact. Your agent should be able to quickly give
you information about the steps you will need to take to file your claim
and make sure valid claims are properly paid.
If your agent is an independent or captive agent, he or she will submit
the initial claim for you so that you can focus on other aspects of your
life affected by the loss, such as medical care for yourself or a family
member, securing alternate shelter or transportation, or dealing with
police or other law enforcement authorities.
If your agent works for a direct writer, he or she will direct you to
contact the company's claims department and may put you directly in
contact with an adjuster or claims processor.
Although the claims staff of your insurance company will handle most
of the communication and details regarding your claim, your agent
should be available to answer questions if your claims adjuster is not
available or act as an intermediary between you and the company's
claims staff when necessary.
The next several chapters are devoted to describing the facets of
home insurance, helping you select the type of home insurance policy
that is right for you and helping you find ways to save money on your
home insurance premiums.