New Year, New Agent? Choosing the Right Type for Your Insurance Needs

134214747Finding the right insurance agent can be just as important as finding the right doctor or dentist.  Ultimately you’re going to put a lot of faith in this person and hope that they have your best interests in mind while looking out for your financial security.  The more you have to protect, the more crucial this decision becomes.

It’s important to understand what types of insurance agents you have to choose from.  In general there are three main groups:

  1. Online or telephone agents who work directly for the insurance company.
  2. Captive agents who typically represent just one insurance company.
  3. Independent agents who represent multiple insurance companies.

I would like to start by saying that I have personally sold insurance as an agent in all three groups and can attest that there are good and caring professionals from each one.  While I recommend choosing an independent agent, each group may have advantages and disadvantages.

Purchasing insurance online or from a call center agent can pose several challenges.  While more popular for personal insurance, I don’t recommend this method for purchasing business insurance based on the complexity of the coverage you may need. Unless you feel confident that you understand what coverages you need and how much coverage you should have, you’re taking some chances with this method because you will typically not have the advice and guidance of an insurance agent.  Online and call centers profess to be quick, easy, and cheap and at times they may be one or all of these things, but without an insurance agent you are also without an advocate when it comes time to file a claim. Also, if you’re not happy with your renewal price you’re back to surfing the web or calling around as the process starts all over again.

The advantage of working with a captive agent is you have someone to advise you on coverage needs and concerns.  A captive agent may focus mainly on personal insurance for auto, home, and life but could also offer some business insurance products.  The challenge of this method is the agent traditionally represents only one insurance company.  If you’re not happy with your renewal price or need a type of coverage they don’t offer, you’re back to square one and looking for an agent.  A captive agent won’t be able to really shop the market for you each year.  As a former captive agent, in order to address renewal pricing concerns I had to fall back on coverage reduction as a potential option for my clients.  This was not an ideal solution, but I simply had no alternatives when price was an issue.  In my experience, I have seen many captive agents make the move to becoming an independent agent because of their frustration with not having more options for their clients.

Independent agents represent multiple insurance companies and have the widest variety of available insurance products and services.  While an independent agent typically represents multiple insurance carriers, they are not an employee of any one, and are there to serve as your advocate in obtaining you the right coverage at the best value.  With an independent agency, you may find the added benefit of not just one agent but perhaps multiple agents specializing in your area of need but still working in tandem for you under one agency.  These licensed agents may specialize in various areas of expertise from personal lines to particular business groups like construction, manufacturing, or food service.

I was reminded the other day of the important role an independent agent plays as your advocate in the event of a claim.  An agent I know was working on a quote for a prospective new business client when the prospect suffered a loss. This prospect had purchased two separate policies from two different companies. The policy that related to the loss was purchased on a direct basis.  It became clear very quickly that the prospect was in great need of a claims advocate.  They had several questions about the loss and what to do.  The direct company was trying to set up a time in a week or so for the adjuster to inspect the loss, but ultimately the insured felt helpless and unsure of what to do in the meantime.  The independent agent received a one page e-mail from the prospect titled “HELP!”  They were apologetic about bothering the independent agent, but had a list of questions and just needed someone to talk to.  Even though they were not yet a customer, the agent contacted me to discuss the claim and the questions the prospect had.  He then drove out to see them and tried to help explain their coverage and the claims process more thoroughly.  I have no doubt that after this experience, this prospect will soon be a customer of the independent agent. It reinforced not only the dedication to helping people I have seen time and again from the independent agents I work with, but also what a critical role the independent agent plays as your claims advocate at the time of loss.

As I mentioned before, there are good, professional, and caring people from all groups.  However, I’d like to make a recommendation to you for the New Year: if you don’t currently work with an independent agent, please take the time to reach out to one before your insurance policy comes up for renewal.  I believe you will find the experience well worth your time.  With the variety of independent agents available, the right agent is out there and ready to serve as your advocate for many years to come.

Have a happy and safe New Year!

8 Comments on “New Year, New Agent? Choosing the Right Type for Your Insurance Needs

  1. I like your idea on considering a captive agent when looking for insurance. I would imagine that because they work with one agency it would allow you to find someone who is experienced with the agency of your chose. I’m looking for a new insurance agency so I’ll have to consider finding a captive agent to help me out.

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  2. I have heard that independent agents have a wide variety of resources that they can use to find the best insurance rates. I would be curious to see if they can find the best way to bundle policies. I have heard that buying multiple kinds of insurance from a single company can help you save money.

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    • Thanks for your comment and yes! I find most agents will try and bundle with one carrier to max your savings. In some cases with a bad driving record or home claims is might make sense to split them up. A Trusted Choice Independent Agent will be able to look at all those options for you. Great comment!

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  3. I agree with your opening statement that finding the right insurance agent is just as important as finding the right dentist or doctor. It’s important that we feel like our business or family is financially protected by the insurance we have. You can save yourself a lot of stress and worry by finding a good broker who knows your needs and helps you find an insurance plan that covers those needs without breaking the bank.

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  4. I really liked what you wrote here about choosing an insurance agency that meets all of your needs. My wife and I did not know that you could work with captive agents who also advise you on coverage needs and concerns, which is a great benefit. We are hoping to find some great bonuses this summer when we switch insurance companies! Thanks again!

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  5. My wife and I recently purchased our first home. We have been looking into different insurance agencies, but we’re not sure where to go. I didn’t realize how important it is to choose a agent that is able to advice you on what coverage you need. I’ll be sure to share this info with my wife.

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  6. I like how you said that independent agents represent multiple insurance companies and have lots of options for their clients. I think that this would be a smart way to look for a good insurance agency to work with. It think that it’s also good to realize that you could talk to the insurance company directly and that you could get information on pricing and packages in a really efficient way.
    http://www.consolidatedagencyinc.com/insurance-services

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