CHOOSING AN INSURANCE
Buying your first car, moving to a new state, losing or changing your job or starting a small business – just a few of the life changes that should trigger a review of your insurance. Picking the right insurance coverage for you and your family isn’t just about understanding your insurance choices and selecting the right policy – it’s also about finding the right insurance agent. So, when life throws major changes at you, the National Association of Insurance Commissioners (NAIC) offers these tips to help you find the right agent for your insurance needs.
Independent Agent, Captive Agent, Insurance Broker – What’s the difference?
When you start your search for an agent, you’ll have a couple of different types to choose from. You can pick an independent agent or a captive (sometimes called direct) agent. An independent agent may have contracts with several different insurance companies. A captive agent writes exclusively with one company. Independent and captive agents represent the insurance company and receive a commission from the insurance company.
For more complicated insurance transactions, such as those involving insurance coverage for a small business, owners may choose to utilize an insurance broker. An insurance broker represents your company in a search of the local insurance market to find the maximum coverage for the best possible cost. Because the broker represents you, brokers generally charge a fee for their services.
How to Start
Developing your knowledge of insurance will help you make informed decisions about the coverages you and your family need. Understanding the terms and coverages used in the different types of insurance will help you work with an agent or broker selecting the most appropriate policy. Before searching for an agent, brush up on your insurance knowledge at the NAIC’s Insure U website (www.insureuonline.org).
Finding an Agent
So, how do you go about finding the right agent for your needs? Once you have a better understanding of your insurance needs, here are a few places to start:
Not all insurance companies use agents to sell their products. You can choose to do business directly with many companies. Purchasing coverage directly online from the company, for instance, could be cheaper because the company doesn’t have to pay an agent a commission. If you choose to buy directly from the company, be sure to check that it is licensed in your state and research the financial stability of the company and complaints filed against it.
Selecting an Agent
Whether you’re looking for your first agent or thinking about switching agents or companies, it’s a good idea to have several to choose from. When evaluating your list, consider these things:
What to Expect
Now that you have a short list of potential agents, what should you expect when you go to the office to purchase coverage?
Answers to Your Questions – If you have any questions
about the quote or coverages you need, this is the time to ask. If the
agent can’t answer the question, they should offer to find out the answer.
An agent should never leave a question unanswered prior to your
Insurance fraud can happen to anyone, anywhere. Protect yourself during the purchasing process.
The best way to protect yourself from insurance fraud is to research the agent and company you’re considering. Always: Stop before writing your check or signing the contract. Call your state insurance department. Confirm both the agent and company are licensed to write insurance in your state.
About the NAIC
Formed in 1871, the National Association of Insurance Commissioners
(NAIC) is a voluntary organization of the chief insurance regulatory
officials of the 50 states, the District of Columbia and five U.S.
territories. The NAIC has three offices: Executive Office, Washington,
D.C.; Central Office, Kansas City, Mo.; and Securities Valuation Office,
New York City. The NAIC serves the needs of consumers and the industry,
with an overriding objective of supporting state insurance regulators as
they protect consumers and maintain the financial stability of the
insurance marketplace. For more consumer information, visit insureUonline.org.
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