4 common myths about insurance

debunking-insurance-myths
Do your homework when buying insurance.

You study safety and performance ratings before buying a car.

You have your prospective home professionally inspected from basement to roof.

You read labels and select the best foods for your family’s table.

Why should insurance purchases be any different?  Yet even the most conscientious consumer may balk at the complexity of this purchase and just take a shot in the dark, by going with a company whose name sounds familiar.

Shine some light on the subject as you search for the best insurance for your needs by examining these myths about insurance.

Myth #1: All insurance companies are basically alike.

Truth #1: Insurance companies vary in the financial strength that backs your policy, assuring they can meet their obligations to pay claims. Look for an insurer that is financially strong and consistently qualifies for a high financial strength rating from A.M. Best Co., an independent provider of insurer ratings.

Find a local independent agent who lives in your community. An independent agent has a long-term stake in protecting you by following through to your satisfaction.

Myth #2: All insurance policies provide the same coverage.

Truth #2: While many insurance policies contain similar coverages, each company provides unique policy conditions and limitations. Policies that look alike can be changed by a single exclusion or endorsement. Read your policy carefully.

Myth #3: All insurance companies provide the same level of service or claims service.

Truth #3: Your state department of insurance and the National Association of Insurance Commissioners can tell you which companies have the fewest complaints and resolve them effectively. Look for a company that provides personal treatment, prompt contact and fair settlement.

Myth #4: You have no control over the cost of your insurance.

Truth #4: An independent agent can pinpoint exactly how changes in your deductible or your lifestyle can lower your insurance costs. He or she can propose safety measures that earn discounts or tell you how to package one policy with another to save money and improve coverage.

Independent insurance agents make a living by knowing which companies act responsibly and which policies are best for a specific client’s needs. Your local agent can help you make an informed insurance purchase that provides stability, quality and convenience.


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16 Responses to “4 common myths about insurance”

  1. Serge Blanco

    You can most of this info from online quoters and informational sites. The value of agents is overstated. They make money from volume and saving you $50 equates to a $2.50 or $5 difference to them. They’re goal is to turn quickly and go to the next one.

    Reply
    • David Barber

      Serge,

      I think it’s just like anything else in a service oriented job, there are definitely agents whose goal it is to do exactly what you said, but there are also agent who want to do what’s best for their client and who genuinely care about their clients and their individual needs. I’ve found that it’s much easier to spend time with a client, treat them right and spend however much time it takes to thoroughly expdoesn’t differences in companies, coverages, limits, deductibles, etc. than to just write the business and move on and hope you keep them. Keeping a client and making them happy is much easier than just trying to churn out clients. Despite what many people think, insurance is NOT a commodity where price is the only factor that should be considered.

      If you have a good agent, they should know you and your situation just by taking a glance at a couple of notes (or less). If you have an online company or 1-800 number, you are going to have a different person you talk to every single time you call and need something and you are going to have people who are only beholden to the company (not to mention wait times and possibly getting a good or bad rep or someone who doesn’t speak your language). Your agent should care about you much more than Joe in a call center who gets a check weekly from the company you are having a problem with. Finding the right agent is just as important as finding the right company.

      Reply
    • Fletcher Songe

      As in any business, the few give the majority a bad image. Agents definately are looking out for their members interest. If they do not….are you familiar with Errors and Omission? “Value of agents is overstated.” Really? When a disaster strike`s, who do you think are the first line response until their Cat (disaster) Team can assemble. Certainly not the no name, no face direct toll free number. Face to face activity in every “Cow Town USA by agents looking after their members will always be in demand. Check the retention of an agent book of members which is in he 90% as oppose to customers who buy over a long distant phone or internet. They are here today and gone tomorrow. No loyalty, no relationship. “Value of agents is overstated?” No way.

      Reply
    • madenusa

      If that’s the king of person you are, that is what you expect others to be

      Reply
  2. Cincinnati Insurance

    Serge, we respect your opinion. However, Cincinnati Insurance believes that building the right insurance program for a family or a business is not a commodity transaction. We believe insurance buyers can benefit from access to agent expertise, differentiated coverage and customized services.

    Reply
  3. Jose R. Sanchez

    I’m agree that not all the Insurance Companies are the alike. In my opinion an independent agent could make the difference but only if it works to find the client requirements and provide the best insurance solution for them.

    There are agents that are mainly concerned about getting the best commision possible and not about what their clients need.

    So I would say that it is important to lern which are the best Insurance Company for us but it is important too finding a good agent or broker and requireing them to comply with the highest service standard possible.

    This is the only way tu be sure our insurance is the best we can get.

    Reply
  4. Nigel

    There’s no such thing as an independent agent. By definition and agent acts for one or more companies for which he or she holds an agency. The truly independent insurance advisors are brokers who are not beholden to any one insurance company

    Reply
  5. Paul Evans

    I dont know about the US, but here in the UK Insurers have constantly sold their product on price and ignored the fact that buyers are intelligent. Now in the UK buyers only know how to differentiate on price, leading to a downward spiral where premiums are cut, so services are cut and claims are put under more scrutiny. UK buyers are complaining in higher numbers than ever about the service they receive.
    Had brokers/agents remained in charge of selling to customers we would have had a much more positive outcome, firstly buyers would always get the right policy with the right level of cover and secondly buyers would get a true comparison between different suppliers!

    Reply
  6. Denise

    Serge, Bad apples exist, but good agents improve coverage, can save you money, give advice, and stand up for you when you have a claim. They EARN your business after the sale because they know you and care about YOU. If they don’t, they won’t be your agent long. Good agents know that and aren’t in it for the quick sale, they focus on service and relationships.

    Reply
  7. Donna

    As an independent agent, I’ve noticed a trend of people trying to find a “real” person that will help them with insurance needs. It’s not just about price and premiums. It’s nice to have someone local to explain things and to help run interference with the Insurance companies. Sometimes we spend lots of time with one customer and not so much with another. We don’t get paid any more for one than the other, we just try to help.

    Reply
  8. Daniel P

    Hmmmm, it seems that many opinions are out there however facts seem to be in short supply. I speak as a former company underwriter, a captive agent, an independent agent, and 25 years (yikes!) in this business. Agents/brokers etc. are no different than a car mechanic, a physician, or any other person. There are some who care deeply about what they do and there are some that are in it just for the money. The money people don’t last that long, never have and never will.

    The people who act professionally and show a modicum of customer service to their clients are the ones who get referred and do well. Some of us are very good at caring for the customers needs because someday they may choose to leave for an ‘800’ number, and my experience is that they usually come back to me. In reference to advice, council, and making the best choice in company, premium, and coverage? I don’t charge for this crucial information, I educate the consumer and provide feedback regarding their needs. If we end up working together I’m happy, if not, then I just raised the bar considerably for my competition as well as what the insured should expect. Send them a quick ‘thank you’ note and move on. Do I get used sometimes? Yes! Do they usually contact me again? Yes. Lose with class people.

    In our industry any stripe of agent does have a contract that makes them beholden to the insurance companies they represent to ‘act in the best interest of the company’. That does not eliminate the insurance contract that is in place between the client and the company. Since the contract is written by the company, it is considered to be a contract of adhesion which in the end is beneficial to the insured because any ambiguity in a policy must be favored towards the client. This is insurance 101.

    My clients who point this clause out to me (happens all the time when you are a captive agent or an independent agent) I know that they usually have been given only part of the information. Yes, I am contracted with the company and if I make an error I have a responsibility to make the client whole again. I will either get sued by the client for malpractice, or the company will pay the claim and then they will sue me for malpractice. This situation has never happened to me, a miracle perhaps, but I know my job thoroughly and many, many times have fought with the company to pay a claim that they may have denied. I am absolutely in a contract with them, however my reputation and relationship with the client is just as important.

    Most consumers don’t realize that if an agent fails to provide proper coverage to a client, that is an act of malpractice on the agent’s part. We have to carry insurance for this because if we fail to cover our clients properly it is not their fault and they should expect to be made whole.

    There are clients out there who do need the service of a broker when they have an unusually tough product or premises exposure and the standard market doesn’t seem to have the appetite for. Sometimes the client gets put in the sub-standard market (this isn’t meant to be derogatory) because they can’t get coverage anywhere else. If this happens to your business, ask the broker to find you a market domiciled in the USA, ask the broker if the company is admitted to do business in the USA, and most importantly ask the broker what the financial strength of the company they are using for your coverage is. Yes, the broker is completely free and clear of contractual obligations to the company…….. but they are not free and clear of their obligation to your business to be insured properly. You, the client are the one paying them to do their job and hopefully they are very experienced in your type of business and the exposures you present. Just make sure you ask them what the process is when a loss that should have been covered, isn’t… and that very loss becomes a self insured retention. Sometimes you need to use a broker and I know many very, very good professional ones who use every avenue to properly cover you.

    Whichever you use, independent agent, direct writer, or broker, make sure that you find the proper answer to claims questions, and will they be as available to you when they were courting the sale as they should be when you have a loss.

    Reply
    • Maureen

      Wow–What a great tribute!! I am glad my Dad taught me the value of an independent agent. :)

      Reply
      • Daniel P

        Thanks Maureen, sometimes educating your customer about options that are out there can usually lead to ‘I wonder why my current agent never told me that’ and generally, you just got a new customer! Cheers!

        Dan

        Reply
  9. Alela Uap

    What is the work of agent to the client who pretend he now more concerning insurance.

    Reply

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