Can "Cheap" Insurance Agents Really Get Better Deals?
TV and Radio Insurance Jockeys
We have all heard the ads on the radio, TV or internet.
We will get you the lowest price for your insurance...
And they do a good job of doing that. How does it work? What do they do that is special to get these great deals?
Let's first clear up one question. Can they get insurance cheaper for you than another agent? Not really. Why? Because all agents use the same way of getting price quotes for you based on the information you provide. So technically they should all get the same quote from the same insurance company.
How do the online guys save money?
So how do they "save money" for you? Simple. Some actually find a low priced policy by price shopping across various insurance companies. They are able to compare the price quotes from different insurance companies and provide you with that quote. It's called "brokering" in the insurance world. Nothing unique to that practice. Others, company agents, only work with a single company, so they give you the lowest price quote from that one insurance company.
But do discount brokers really provide any deeper discount than another broker checking premiums at the same insurance companies with the same information? Not really. Any broker can do the same thing for you. What you should really pay attention to is the follow-up and support that is provided to you by that broker ... after the sale, as well as really getting to you know your needs ... before the sale.
Here is what is important when buying insurance. Price is an important issue, but not the ONLY issue that you should consider. Having a knowledgeable broker who looks at all aspects of your quote is important. The financial strength of the company is also important, as well as their performance in providing claim support. Who will be there for you after you purchase your insurance? The off-shore telephone support person? Or the broker you worked with to purchase your policy and their local support team.
Your broker...
Don't forget about your relationship with your broker. That person and brokerage are there to help support you and help obtain what you need for the best price, THEN... support you. An agent shouldn't just "sell" you what is cheapest or what they make the most money from then disappear. Your agent should focus should be on what is best for you. And in some cases, the cheapest insurance may not be the best solution for you. Plus follow up in the future to make sure that the protection you have is still appropriate for your future situation.
So many options...
Insurance policies can be confusing and they have many options. Some you don't need, but others can dramatically improve your coverage for just a small additional premium, or sometimes no additional cost. It's important that your broker/agency really understand your needs. Your life has a full spectrum of risks you need to address. They are all typically interrelated. Your risk management solution should also provide a comprehensive plan. The best way of doing that is to work with a broker/agency that can provide the various different policies to help you develop a comprehensive, yet financially efficient solution to the risks in your life.
By working with a broker, rather than a single-solution web site, the protection you want can be customized for your specific needs and budget. That is something that simply won't happen with a TV or radio insurance company agent.
WhiteCoat Risk Management provides these articles to help improve general risk awareness in all aspects of your life. It is not responsible for any actions you take or fail to take regarding any aspect of your financial planning or risk management. This article is provided for information purposes and is not intended to provide individualized advice. You alone are responsible for your financial decisions.
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