Not All Insurance Companies Are Created Equal

 Insurance is big business -- it is getting tougher and tougher on the industry to get insurance, so they look for reasons to disqualify you, or at least to spike up your premium rates.  There is that heartless, cold bit again!  Why would they do that?

    They have their reasons.

    The average insurance company, to put it bluntly, has been burned before; they are like a brokenhearted lover who is afraid to trust again.  But the good news is that the responsibility you show -- the more capable you appear to be in handling your life -- the better the insurance company will "like" you.

    That said, I do have a caution against putting on your rose-colored glasses too soon:  not every insurance company just wants to help people.  In fact, I would be lying if I told you that there was no such ting as a bad insurance company.

    Great.  Just what you need -- to not only have insurance companies examining you as if you are a specimen under a microscope ... but now you have to worry about their possible motives too!  What is up with that?

    Do not panic.  Yeah, it is not a great situation to have to try to "read between the lines" when you are being courted/pitched by an insurance provider.  Fortunately, you can request a copy of my book, and have our office to help you make sense of the mess!

So Where Do You Start?

    Always start with the agent first.  There are a lot of great companies out there you may never have heard of, because they don't do the massive advertising.  Instead, they focus on providing great service and quick claim checks.  But in the end ... you want your agent to answer the phone and work on your behalf if you have a claim.

    Here's a list of things you should be looking for in your agent:

    1.    The agent has been in business for a number of years and is a "seasoned" professional.

    2.    They send out monthly quarterly newsletters to stay in touch and keep you informed on the latest about insurance.

    3.    They do an annual insurance review with you to make sure you are adequately protected.

    4.    They have many client testimonials they are happy to provide.

    5.    They are a good listener and ask great questions.

    6.    They answer any question promptly by email or by phone.

    7.    They know about all the discounts and makes sure you are getting the best price possible.

    8.    They represent several insurance companies and can take care of all your insurance needs.

    9.    They are properly licensed and do not have a track record of complaints.

    10.    They are always looking for gaps in your protection.

Independent vs. Captive Agents

    This is a simple question:  Do you want an agent who works:

    *    for you (independent agent; or

    *    for just one company and can only place policies with that company (captive agent).

    A great question to ask a potential agent is if they have ever been a captive agent in the past.  You will find many independent agents started down that road, but changed at some point in their career.  There ar eseveral reasons.  One might be to give better options for their clients.

    No one company is the best at everything.  If an agent only handles one insurance company, you may not be getting the best coverage at the best price.

    And if all you go to is a captive agent, you'll never know.

    Now here is where it gets very sticky -- some agents may appear to be "independent" when, in reality, they are only authorized to deal with multiple affiliates of the same company.  Therefore, whle it seems as if this agent is "independent" in actuality, he or she is doing the bidding of one carrier.

    So why aren't all agents independent?

    It all boils down to security.

    Large insurance companies (like State Farm and Allstate) pay agents for that exclusive relationship.  They may give the agent a stripend every month to pay for the office expenses and their own insurance.

    But the number of captive agents is declining.

    Despite the exclusive arrangements and the business that can come from those arrangements, the flip side of the "captive agent" coin is not all rainbows and roses for their carriers either.

    For instance, not all carriers are thrilled about paying the expenses of captive insurance agents -- especially in areas where they are not looking for growth, such as coastal parts of the country.  Thus, as of late, it is becoming increasingly more common for insurance companies to "set thier captives free", so to speak.  They "dump" their captive agents and take their changes on non-captive agents bringing in business --- or perhaps just do more marketing on their own.

    Ouch!

    Yes, it hurts when the captive agent loses their contract with the big insurance company.

    However, many of them walk away from the contract themselves.

    So what is in the other pasture, were the grass looks greener?

    Independence.

    This is where agents who do not want the restrictions of one company hang out, where the non-captive agents live.  These agents compete not only against fellow independents, but against insurance companies and their captives.

    They have the strong consumer advantage of giving you optimum choice:  they represent multiple insurance companies and have not specific allegiance.  The make their money taking care of you ... not any particular insurance company.

    There is no easy answer

    In the abstract, this sounds like a clear choice:  go with an independent agent.  However, it is not quite that simple:  the fact is not all non-captive agents are necessarily completely independent.

    (Confused?  Yep.  I thought so.)

    Like everything in life, there is not always a clear cut answer.  You should always interview the insurance agent.  Find out 

    *    how long have they been in business;

    *    how many companies they represent;

    *    if they can handle your insurance needs ... (including for your business)

    *    what happens if a claim needs to be filed (do you get a live person on the phone at any time of the day);

    *    if they are up-to-date with technology?  or do they still have filing cabinets full of paper?

    *    how are you treated on the phone?

Brian Cameron

Cameron Group, Inc

845-627-2130