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Selecting the right insurance coverage isn't just about understanding
your choices and choosing the right policy. It can also be about finding the
right insurance agent. 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, you can pick an independent agent or a captive (or direct)
agent. An independent agent may sell policies from many different
companies. A captive agent sells insurance for only one company.
Independent and captive agents represent insurance companies and receive a
commission from the insurance company for the sale of its policies.
For more complicated insurance transactions, such as coverage for a small
business, you may choose a broker. An insurance broker represents
your business by searching the local insurance market to find the right
coverage for the best price. Because the broker represents you, they
generally charge a fee for their services.
Selecting an Agent
Whether
you're looking for your first agent or thinking about switching, it's a good
idea to have several choices. When evaluating your options, consider the
following.
Licensing —
Make sure the agent and insurance company are licensed in your state. You can
check company licensing information through the NAIC's Consumer
Information Source (CIS) or by calling The Alabama Department of Insurance.
Credentials —
Many agents and brokers will have letters behind their names on their
business cards. These represent designations or credentials they have earned
from various insurance groups or associations. Ask them what these letters
mean and what they had to accomplish to earn the credential.
Complaints —
While you're checking whether the agent and the company are licensed, also
check to see if they've had complaints filed against them. For the company,
you can check the NAIC's CIS, call The Alabama Department of Insurance or contact the Better Business Bureau.
Financial
Strength of the Company — When evaluating a company, you also want to
check its company financial rating.
What to Expect
What
should you expect when you visit the agent's office to purchase coverage?
Choices: If you're using an independent
agent, you'll have choices of companies and coverages. Evaluate your needs
and the options to make sure you are getting the proper coverage best suited
to your situation.
Honest Sales: You shouldn't feel pressured to
choose an agent, an insurance company or a quote. If an offer seems too good
to be true, it probably is.
Answers: If you have any questions about
the quote or coverages you need, ask your agent and keep asking until you are
satisfied.
Keep in
mind, not all insurance companies use agents. You can do business directly
with many companies by purchasing coverage online. These policies may be less
expensive since the company doesn't have to pay the agent's commission.
Regardless of how you buy the policy, make sure the company is licensed in
your state, is financially stable and check to see if they have complaints.
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