WHY BUY INSURANCE FROM AN AGENT AND
NOT DIRECTLY FROM A COMPANY?
I recently saw a Facebook post where someone asked their friends to recommend insurance companies. One of the comments was to buy direct and not use an agent because the company has to pay the agent commission, making it more expensive. While yes, it is true that insurance agents are paid a commission, it is not necessarily true that purchasing insurance directly is less expensive. According to our agency’s largest carrier, the cost per policy is more expensive on direct sale policies. Direct insurers trade commissions for massive advertising expenses to obtain customers. They also incur higher costs to maintain interactive online platforms and customer service centers.
Other Considerations:
How well do youunderstand insurance?
It’s an important question you need to ask yourself prior to purchasing insurance online or directly from a carrier. Insurance agents are required to be licensed by their state and the states they conduct business to ensure they have adequate knowledge of insurance laws and products, to protect consumers from unethical practices or fraud, and to hold agents accountable to regulatory standards. Licensing allows states to monitor insurance activities and enforce rules, which safeguard public trust in the insurance industry.
Consumer Protection
Ensuring Competence: Licensing requires agents to demonstrate basic knowledge of insurance products, policy provisions, and relevant state and federal laws before selling insurance.
Preventing Fraud: Licensing helps to prevent misconduct like misrepresenting terms or stealing money, protecting consumers from fraud and unethical behavior.
Regulatory Oversight
State-Level Regulation: Insurance is a heavily regulated industry, and licensing is a state-level process that allows agencies, like the Ohio Department of Insurance, to administer exams and issue licenses.
Accountability: Licenses provide a way for state regulators to track agent activities, monitor compliance with regulations, and take action against agents who violate rules.
Maintaining Industry Integrity
Building Consumer Trust: A licensed agent signifies they have met the necessary qualifications to operate ethically and legally within the industry, which helps build consumer confidence.
Enforcing Ethical Conduct: Licensing ensures agents adhere to ethical practices and professional standards, contributing to a more trustworthy insurance market.
Insurance Agencies offer:
Licensed Expert Consider Price and Coverage
Personalized Service Offer Expert Advise and Guidance
Advocate for the Customer Tailor Coverage Based on Your Needs
Claims Proficient Find Discounts and Savings
Client Focused Can Offer More Options
Save You Time Independent Agents Access Multiple Carriers
Community Drive- Keep it Local! THERE WHEN YOU NEED THEM
As you can see, there are many advantages to purchasing your insurance through an agency. Purchasing through an agency gives you one on one service with the same agent for all your needs. If you purchase direct, you must call the company for help or information and are always speaking with someone new explaining who you are and what you need every single time you call. Having an agent allows you to develop a long-lasting relationship. You know them, they know you and understand your needs.
Insurance agent:
(in-shoor-uhns-ey-juhnt)
One who solves problems you did not know exist in ways you do not understand.
See also: superhero, legend, rockstar