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Insurance Agents vs. Insurance Websites: Where Will You Get the Better Buy?
Insurance Agents vs. Insurance Websites: Where Will You Get the Better Buy?
We’re all looking for ways to save money and cut costs. It’s just that kind of economy.
My brother-in-law, a general contractor, always says, “You buy price, you buy twice.” In other words, if you buy the cheapest thing, you’ll either have to replace it sooner than if you bought the higher-quality item or have to redo the project when it doesn’t come out the way you wanted.
While the insurance business and the construction business are pretty different, that sentiment rings true for me and my clients. Time is money, and you can waste a lot of valuable time (and money) if you don’t know what you’re doing when you’re shopping for insurance.
As an independent agent at an insurance business started by my father[ST1], I may have more experience than most, but I don’t think shopping for insurance has to be that hard. There are so many options for insurance, and every customer has different needs.
When shopping for insurance, you need to consider your priorities. Start by figuring out what is important to you:
- Price. Are you interested in the lowest price possible? Are you willing to give up some customer service in order to get a lower price?
- Availability. Is it important to you to stick with your current insurance carrier, or are you open to working with another company if yours doesn’t have the policy you want?
- Location. Do you want to have a neighborhood insurance agent whose office you can visit? Or do you feel more comfortable searching anonymously online?
- Customer service. Is customer service important to you? What about claims administration?
One of these might trump the rest for you. Or you might be the kind of insurance policy shopper who wants all of the above.
Benefits of Buying Insurance from an Insurance Agency
A woman, now a client, contacted us when she was buying a house after her divorce. She was excited, but nervous, because she had never handled financial matters when she was married. When she contacted us, she made it very clear that she was looking for the lowest price for the insurance policy she needed and that she was also shopping online.
Since she was exploring all her options, I gave her a quote and told her to follow up with me if she was interested. After a few days, she called and asked to meet me in person because she didn’t understand the insurance options I had offered and what she was buying. When I met with her, we walked through what kind of coverage she was looking for and what options were available to her.
She ended up buying a homeowner’s insurance policy through us. She probably could have gotten a similar plan online, but she bought from us because we helped her understand what she was buying.
If you’re not sure of what insurance options are available to you, you’ll probably benefit from sitting down with an agent to discuss your needs and priorities. When you meet in person, you can talk through your issues and find the most appropriate insurance coverage. It’s hard to do that with a website, but not everyone needs the same level of hand-holding and customer care.
As an insurance agent, I have to understand my client’s financial considerations in order to structure his or her insurance accurately and provide the most comprehensive protection. Insurance, as I’ve said, is about protecting your assets. You don’t want to find out you’re underinsured after a catastrophe strikes.
How to Buy Insurance Online
If you’re familiar with various insurance policy options and know what kind of coverage you’re looking for, shopping online for insurance will probably be just fine for you.
With online insurance shopping, it can be very easy to comparison shop for different plans. Plus, it’s nice to have some expectation of price and benefits options before walking into an insurance agent’s office, so you won’t be blindsided.
If you’re looking for a good carrier you can commission online (or over the phone), be sure to check the ratings. A. M. Best, Duff & Phelps, Fitch Ratings, Moody’s Investors Service, Standard & Poor’s, and Weiss Ratings give ratings based on criteria like company earnings and management ability, integrity, and experience.
The financial ratings aren’t the same as a customer satisfaction rating, but they can give you a good idea of the company’s approach and financial statistics. JD Power provides customer satisfaction ratings for insurance companies.
You should also check out the insurance company’s website(s) and customer service tools to make sure that it is able to handle your needs and provide adequate customer service. Finally, every insurance company must be licensed to do business your state. Your state’s department of insurance will be able to tell you whether an insurance company or insurance agent is licensed properly and if there have been any complaints.
What’s shaving a few dollars off your monthly premium if you can’t get service when you need to file a claim?
Lastly, use a search engine like Google or Yahoo to search the name of the company and the word “complaints.” This will help you understand exactly what kind of company you’re getting in bed with.
What’s the Best Approach to Insurance Shopping for You?
A good strategy might be to review your insurance regularly in person with an agent who can help you make sure your changing needs are being covered. If you’re then going to go online to buy, make sure you are educated and have a full understanding of what you’re buying.
Just remember that there’s no one right insurance plan, or one perfect way to shop for something as important as insurance. The bottom line is that you need to identify your priorities, do your research, and find the best plan for your needs. You might be able to do this on your own, or you might need the help of a trained professional to make these decisions.
Linda Rey is a licensed insurance agent at Rey Insurance with a broad spectrum of expertise in life, accident, health, property and casualty insurance as well as retirement planning and college funding strategies.
Follow Linda on Twitter.
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Linda,
I read your article and found it most informative. I liked your explanation of the pros and cons of internet shopping for insurance vs. insurance agency shopping. This information is helpful to individuals shopping for insurance.
The part that was not covered was claims. What happens when the insured has a claim. How difficult is it to file? Where do they file? What information is need to file a claim? An agent can direct the insured to the claims department and can answer questions about coverage. The insurance web site cannot give the personalized service.
I have worked as a consultant for insurance companies for years assisting claims adjusters evaluate how and why losses occurred. I have yet to meet an insured that completely understood the coverage they bought. (usually year ago)
For example, the insured house floods. Was the property covered under the homeowner’s policy? What is the difference in flood damage and water damage? If you asked 100 homeowners, maybe 1 out of 100 would know the difference and if they have coverage.
The policy holder may feel good about having coverage but they feel terrible when disaster strikes and they expect their loss to be covered and they are not.
Even though, agents explain these types of losses, it is difficult for the homeowner to understand. Water damage is water damage. Right? WRONG!
Insurance jargon is a world of its own. The legalize discourages homeowners from trying to read their insurance policy. This is an area the policy owner needs help.
I attempt to provide insight into the technical end of the claims process at http://www.atlanta-insurance-claims-resource.com. I discuss claims adjusters, wet basements, vehicle accidents and slip and fall accidents and much more.
Thanks for allowing me to comment on your site.
The Claims Engineer
Elvin Aycock, PE