There are two distinct classifications of property casualty agents: captive and independent. Captive agents generally represent one company and some of them may have the ability to sell other companies, but that’s the exception not the rule. Independent property casualty agents have access to dozens of insurance companies and quite often compare rates, company claims paying ability, policy provisions and electives like deductibles. But that’s still just a basic evaluation to help get you in the game in your decision making process. None of these due diligence items reflect the customer service experience during a claim or the support of the local agent.
TV commercials promote saving hundreds of dollars in premiums if you switch to their company. Who doesn’t love to save money, especially on insurance? But be mindful that you have to have an “apples to apples” comparison of provisions and definitions to determine if the savings is truly a deal. But it’s not just about price; it can be about the aggravation. So you save $400 but you can’t talk to a real person in an office in your town. Or you go through the claims process after an accident and you’re brutalized by the experience. Sometimes ‘saving a buck when the service sucks’ isn’t saving at all- if time is money.
Bundling home and auto insurance can generate a discount, but it may not be cheaper than buying a la carte with different companies. This is where agents who have access to a variety of insurance companies are worth the relationship. After all, most consumers buy the relationship, not the insurance company.
Increasingly, property casualty agents are becoming defensive planners. They act as financial stewards covering the economic liabilities of their customer base. It’s often been said that defense wins Super Bowls. If you’ve ever experienced a claim, especially if it was your fault, the economic ramifications could sink you financially and drown you in debt. So a good agent is going to look out of exposures and liabilities to protect the lifestyle of their customers.
You need to vet your insurance agent, like an NFL team recruiting a defensive coach. Check out your state’s insurance department to see how long they’ve been licensed and if there’s been any bad behavior with your prospective agent. You need to stalk their social media for their LinkedIn profiles and Facebook postings. You need to ask for third party referrals that you trust. And lastly, can your prospective agent play well with others on your financial team, especially the person in your family or business who runs the finances? This is some spadework to be sure, but in the long haul it will be worthwhile.