When you are thinking about buying an insurance policy, your first instinct may be to go directly to the insurance company. The reason most people do this is because they think they are saving money; and this makes sense. In the world of commerce, the middle man buys a product in bulk from the manufacturer and then marks up prices when he or she sells to you. By cutting out the middle man and going direct, you save money. However, when it comes to insurance and insurance companies, this is not always the case. By purchasing directly from an insurance company, customers are unknowingly taking a risk they do not realize exists.
Even in the old days, insurance companies did not sell directly to consumers. They had agents who were professionally licensed by the state for that. It was the agent’s job to offer products to the public and the consumer did not pay anything to the agent because he was employed by the insurance company.
Insurance agents still exist today, but they operate in a different capacity. What changed the game was an invention called the internet. Insurance companies created websites that had the ability to provide quotes and deal directly with the public. This in turn changed the public’s perception and many consumers are now buying directly from insurance companies through their website just by filling out a form.
The job of an insurance agent is not just about selling insurance to the public. He or she is licensed by the state to hold your best interest at heart even though they are employed by the insurance company. An agent that is licensed carries with them the fiduciary responsibility to advocate your needs and interest above their own and even above the insurance company they work for. So basically, the insurance agent works for you.
The insurance agent can do the following services for you:
- Check prices. Insurance agents can check prices for various insurance quotes from many different insurance companies. Because rates vary from company to company, an agent is most likely able to get you a better deal. They also know exactly what you are looking for and won’t sell you something you don’t need.
- Insurance agents are able to sell many different kinds of policies. You can think of them as a one-stop-shop for all things insurance. If you’re looking for renters, business, life, fire or flood insurance, your agent can get all of these things for you and have them on one bill. This way, you won’t have to get different policies from different companies. You also won’t need to get quotes from many sources as your agent will do all of this for you.
- Insurance is a complicated subject. In the end you will be glad to know that there’s somebody who does this for a living and can communicate it to you in a clear way. Just imagine reading a 50-page contract every time you wanted a quote. There are sure to be complicated terms and hidden surprises inside. An agent can explain them to you and spot any hidden surprises.
- Coverage varies state to state and company to company. Insurance comapnies also use complicated insurance jargon while agents can break down what you need to know in an easy to digest format. Insurance company forms also do not follow any standard wording and could contain material that could impact you or your beneficiaries significantly. It’s best to have an expert advisor who is already familiar with a company’s policy and quirks.
By purchasing directly from an insurance company, you are denying yourself the above stated benefits. There is nobody to advise you on which clauses are beneficial and which are not. There also isn’t a licensed, regulated and insured agent working for you so you could end up losing.
Worse yet, some important details might have been missed and end up not being covered. But most importantly, insurance agents are covered against any mistake they could commit. If, for example, the agent sells you a policy that does not meet your needs, the agent could be made liable to you through malpractice. An Errors and Omission policy is like a surgeon’s malpractice insurance. Your lawyer can file suit against the agent and recover damages as a result of the agent’s mistake. This is the extra layer of protection is another reason to work with an insurance agent.
If you are looking for an insurance agent that will find you the best coverage, give us a call at Del Duke Insurance Group at 856-424-7960