Insurance is an arrangement between you and a separate entity. That entity could be an insurance company or a government agency. The arrangement is in the form of you agreeing to give that entity money in exchange for them providing you compensation in the unfortunate event you suffer a loss that requires a large sum of money. The amount of money you pay is largely determined by the likelihood of you suffering from a loss, plus the amount of money it would take to rectify that loss.
Insurance is big business, and there is no hiding that. The statement, “you get what you pay for” is also true in the insurance industry. However, when it comes to the amount you pay, you need to be assured that you are getting the best bang for your buck and not just told, “yes sir/ma’am, the price is higher, but you’re getting what you pay for when you come here.” Without calling names, there are a lot of high profile companies out there that have made this a habit….and a bad habit at that! Like I said before, insurance is big business, and if your agent is worried about the ONE company they represent instead of worrying about the MANY clients they are protecting….well that could get pretty ugly for you! Up next, I’ll give you 5 reasons why you should put your protection in the hands of an independent agent.
BUT FIRST, here is the difference between an independent insurance agent and a captive agent.
Independent Agent: An agent that sells a variety of insurance products (home, auto, life, business, etc.) and can place your coverage with a variety of different insurance companies.
Captive Agent: An agent that sells a variety of insurance products (home, auto, life, business, etc.), but can only place you with the company they represent. They are often pushed to sell more of a certain type of policy or pushed to meet quotas.
NOW, here are 5 reasons why you should choose to do business with an independent insurance agent...
One of the strongest advantages an independent agent has is the ability to hold multiple contracts with different companies. This means the agent is not held back by the rules and regulations of one single company. If they try and place you with Company A, and Company A doesn’t work out because of price, underwriting, etc., then they’ll try Company B, C, D and so on until they find a company that fits you best. Having multiple contacts with different company’s is also good news for people with bad driving records, poor credit, or whatever it may be. Maybe the agent cannot place you with their absolute BEST auto insurance carrier because of your driving record, but they can find a company to place you that offers a competitive price until your record cleans up and you can be moved to a better company.
You have a personal advisor for your IRA’s, investments, health, and wellness, etc., so why would you not have one for your insurance. You spend a lot of money every year on insurance, and it’s important to have an agent that you can talk to when you want or need too. This is not necessarily possible for consumers looking to purchase insurance online. There is a certain degree of trust that comes with sitting down and talking with someone face-to-face. On top of having built a personal relationship with your agent, your policies will also be periodically reviewed so you can be assured that you have the most competitive rates and coverage for when times get tough.
I mentioned earlier that independent insurance agents have contracts with multiple insurance companies. This is important for you to consider because you want unbiased advice when it comes to your insurance. A captive agent is bound to his one contract under the single company he/she represents. If you currently do business with a captive agent, then they will probably never mention this to you, but that one company they represent is constantly staying on their back to write more business. The company wants to make sure that agent is meeting their quota each month and writing enough of each type of policy. This could pressure the agent to push you towards buying more policies that you may need!
EVERYTHING IN ONE PLACE
This is particularly important if you have business insurance needs on top of your home, auto, and life insurance. It also goes back to the advantage of having a personal insurance consultant. Why would you want to have your auto insurance with one company and your home and life with another company? It may be more expensive to do it that, and it could lead to you losing track of your renewal dates on your policy causing them to lapse and you going without insurance until you realize what has happened. With an independent agent, all of your policies, including your business policies are in one place. That makes life easy when you can call ONE person you trust and discuss all of your policies.
When everything is in one place, savings are sure to follow. Everyone deserves to save money! Even though your home and auto may be with different companies, the home policy will often have an “auto policy written in-house” checkbox. If that’s a YES, then you are automatically eligible to receive a discount on your homeowner's insurance. If it is possible and the price is competitive, an independent agent will place all of your policies with the same company and if you have a home, auto, life, and umbrella policy, then that could mean some serious savings for you!!!
Be sure to check with an independent insurance agent near you today and let them take the burden of insurance off your back.
Make Insurance Great Again!
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↓ Top 10 questions I recommend you ask your agent about your homeowner's insurance policy!