One might think choosing an insurance agent should be an easy task. Pick the one that offers you the lowest price, right? Well that’s not necessarily the case and probably shouldn’t be at the top of your list of priorities when choosing the best agent. Lower price can mean inferior coverage and that’s fine until you experience a loss that isn’t covered.
Here are 10 things you should consider when choosing an insurance agent:
- Direct Writers vs. Independent Agents: There are two different ways to get coverage from an insurance company. Direct writers are insurance companies that hire their own sales people to write exclusively for that one company; they work for the company that employs them. Independent agents work for the insured, not the company. However, they have contracts with multiple insurance companies and can usually offer you more options.
- What type of insurance do you need? Some agents will offer many types of insurance and some will be limited in their offerings. For example, some might only offer personal lines insurance whereas others will offer both personal and commercial lines. If you own a business and are looking for an agent to write your commercial insurance, you want to make sure they have some experience in your industry.
- Technical Knowledge & Credentials: You should always ask the agent about their experience before trusting them as your insurance advisor. One indication of their technical knowledge is if they have letters after their name. These letters stand for professional insurance designations that signify a higher level of experience and competence. Some of the more common designations are CIC, CPCU, ARM and CRM. Other things to look for are years of experience and education.
- Personality Traits: Agents get paid commissions by the insurance company, so it is important to find one that is honest and trustworthy. They also should be passionate and enthusiastic about what they do, and of course, you should like your agent. It’s much easier to do business with people we like than people we don’t.
- Questions to ask: It is okay to ask questions when looking for an agent. In fact, you should be asking questions when deciding who you want to work with. Some good questions are:
- What are your areas of expertise?
- What is your reach? Are you local? Statewide? Nationwide?
- What is your experience in my industry? How many years have you been writing this type of insurance?
- Do you have any client references?
- How long have you been in business?
- How many companies do you represent? Which ones?
- Do your homework: Before selecting an agent, you should first do your homework on the agent as well as the agency they’re associated with. Your first step is to google the agent’s name and agency. Are there any news articles about them? Have they faced any lawsuits? Are there any reviews? Have a look at their website. Is it professional? Are there any testimonials? You may also want to look at their social media pages (Facebook, LinkedIn, Google+, Twitter, Instagram) for reviews and educational content.
- Expectations: A good way to gauge if the agent can live up to your expectations is by asking them for a quote before you commit to doing business with them. This should give you a good idea of how efficient they are (how fast they can get you a quote), how thorough they are when explaining what coverage you’re afforded in the policy, why the price varies if more than one quote is provided.
- Detailed written proposals: Once your agent gets quotes for your business, you should review them carefully. There are different types of carriers and coverages can vary dramatically. Some carriers may have exclusions on their policies removing important coverages. Make sure you work with the agent to ensure you have the coverage you need, even if that means paying a little more.
- What to expect after binding coverage: Your agent’s job is not done once you’ve bound coverage and your expectations of them should not end there either. Customer service is what is going to separate a good agent from a great agent. Say you purchased a new piece of equipment, built a new structure or underwent renovations—all of these things, along with many others, can affect your insurance policy. Your agent should be checking in with you periodically throughout the year to ask about any changes that might affect your policy. Your agent should be one that is approachable and reachable at all times because when things do happen, that is when you’ll need them most.
- Times change—stay active with your insurance coverages. As mentioned above, you need to stay active with your insurance coverage because things do change over time. Your agent should also be keeping you up to date on important regulations, new laws, changes with your carrier and anything else that might affect you as the end customer.
Of course there are other things you might want to consider when choosing an insurance agent (How close/convenient is their office? Are they licensed in other states if you ever decide to relocate or open another location?), but these are the 10 things we find to be most important when trusting someone to provide you with the best coverage for your individual needs. Remember, you can always switch agents, but it is much better to do your research beforehand and find a great one that you can work with for many years to come.
Kim Rushlow is a Commercial Underwriter at Hospitality Insurance Group.
Please be advised that the opinions expressed are the views of the author alone and should not be attributed to any other individual or entity and shall not constitute a legal opinion.