Questions to Ask Your Agent
- How can I reduce risk and lower premiums? These are two of the main factors to be discussed when seeking property insurance quotes. Reducing risk will result in fewer claims; fewer claims will result in lower premiums for the policy owner. Carriers may cancel a policy after too many claims, but not all carriers have similar guidelines. Obviously, good driving practices will result in fewer accidents and a burglar alarm may deter thefts, with the benefit of lower premiums due to fewer claims. Sedan cars are less expensive to insure than sports cars, since sports cars are assumed to be driven faster. If your home has experienced a number of weather-related damages, your premiums will be higher due to the increased risk. Always locking your car and home doors and using theft- deterrent devices offer increased security, reduced risk, and lower premiums over time. For business owners, safety rules and procedures along with good maintenance for business vehicles and properties can minimize risk, reduce claims, and lower premiums.
- Are any discounts available? Discounts are often offered with multiple policies, typically 10% or 20% if you purchase a homeowners’ policy along with an auto policy. Other discounts may be available, so always ask your agent how you can benefit from any discounts offered. Auto policies may offer discounts for having a good driving history, taking and passing a defensive driving course, or installing anti-theft devices. Homeowners’ policies may offer discounts for having a burglar alarm installed or for the presence of a fire extinguisher and smoke alarms. Most business policies offer discounts for having no or fewer-than-usual claims and for customers who renew. In states where allowed, mutual insurance companies, which are owned in part by the policyholders and are not stock companies, can pay dividends back to insured customers in years when property claims are minimal. While discounts are common, rebates for sales of insurance are not allowed in most states, in order to combat fraud and kickbacks.
- What is your level of expertise in this area? Ask the agent how many years he or she has been licensed to sell property insurance in the state; how long the agent has been with the agency; what carriers, if any, he or she has worked with; and how the agent became qualified to sell insurance. Many agents specialize in certain areas; ask the agent what types of insurance he or she sells and ask for references of customers in situations similar to your own. Once you’ve explained the type of insurance you need, request that the agent show you quotes from more than one source and have the agent compare and contrast the details of each quote. Listen carefully to the descriptions. An agent is required by law to not speak badly of any insurance carrier or other agent. He or she should state the financial and factual details of a policy clearly, in language that is easy to understand. The agent and agency should also have sufficient customer service staff to assist customers after the sale with any policy questions.
- What is your customer complaint rate? Both the carrier and the agent should be licensed by the state insurance department, which keeps records of any complaints that have been made to the department about either the agent or carrier. Most states offer this information on a searchable website; if a site is not available, citizens should be able to call the department for this information. Any penalties or fines (including loss of license to operate in the state, known as a cease-and-desist order) assessed against either the agent or the carrier will also be public record. Be wary of any agent or carrier that has had multiple complaints that appear reasonable and have not been rectified. Most carriers will have received at least a few complaints, both justified and unjustified; it is important to review the complaints and their resolutions. Too many complaints regarding slow claim payment may be indicative of poor financial stewardship or perhaps insufficient staff to handle the policy load. If an agent has multiple complaints of any kind, a prospective policyholder should be able to ask him or her to explain the situations, in order to make an informed decision about whether or not to purchase from this agent.
Last Updated: 09/13/2012