CHOOSING AN INSURANCE AGENT:
Buying your first car, moving
to a new state, losing or
changing your job or starting a small business - just a few of the life
that should trigger a review of your insurance. Picking the right
Company and Coverages Aren't
the Only Things to Evaluate
When Selecting an Insurance Agent
coverage for you and your family isn't
just about understanding your
choices and selecting the right policy - it's also about finding the
insurance agent. So, when life throws major changes at you, the
Arkansas Insurance Department offers these tips to help you
find the right agent for your insurance
Independent Agent, Captive Agent, Insurance
What's the difference?
When you start your search for
an agent, you'll have a
couple of different types to choose from. You can pick an independent
a captive (sometimes called direct) agent. An independent agent may
contracts with several different insurance companies. A captive agent
exclusively with one company. Independent and captive agents represent
insurance company and receive a commission from the insurance company.
For more complicated insurance
transactions, such as
those involving insurance coverage for a small business, owners may
utilize an insurance broker. An insurance broker represents your
company in a
search of the local insurance market to find the maximum coverage for
possible cost. Because the broker represents you, brokers generally
fee for their services.
How to Start
Developing your knowledge of
insurance will help you make
informed decisions about the coverages you and your family need.
the terms and coverages used in the different types of insurance will
work with an agent or broker selecting the most appropriate policy. Before searching for an agent, brush up
your insurance knowledge at the National Association of Insurance
Commissioners (NAIC) Insure U
Finding an Agent
So, how do you go about
finding the right agent for your
needs? Once you have a better understanding of your insurance needs,
here are a
few places to start:
Not all insurance companies
use agents to sell their
products. You can choose to do business directly with many companies.
Purchasing coverage directly online from the company, for instance,
cheaper because the company doesn't have to pay an agent a commission.
choose to buy directly from the company, be sure to check that it is
in your state and research the financial stability of the company and
complaints filed against it.
Selecting an Agent
Whether you're looking for
your first agent or thinking
about switching agents or companies, it's a good idea to have several
from. When evaluating your list, consider these things:
- Referrals from
Family, Friends, Neighbors, Colleagues - In a recent NAIC survey, 79%
consumers questioned indicated they asked family and friends for
advice; 65% said they also asked colleagues and social acquaintances.
ask around, find out why they like the agent. Is it the customer
the agent friendly and knowledgeable? Did the company they represent do
particularly good job handling a claim? Have their rates for a
coverage increased or decreased over the past three years? Does the
review their policy annually to make sure they're getting the best
the best price?
- Internet -
Search for the line of coverage on the Internet. The largest companies
that line will typically be the first listings you find. Many companies
post lists of its licensed agents online.
Associations or Other Business Owners - Small business owners can talk
local trade associations or other similar business owners, which might
related insurance needs.
What to Expect
Now that you have a short list
of potential agents, what
should you expect when you go to the office to purchase coverage?
- Personality -
Have conversations with prospective agents. Explain your situation and
a quote. Simply asking does not mean you have to work with them. This
chance for you to get a feel for how they work and if you're
- Credentials -
Many agents and brokers will have letters behind their names on their
cards. These represent designations or credentials they have earned
various insurance groups or associations. Ask them what these letters
what they had to accomplish to earn the credential.
- Licensing -
Make sure the agent and the company they are writing your policy with
in Arkansas. You can check company and agent licensing information on
our Department's Online
- Complaints -
While you're checking whether the agent and the company are licensed,
check to see if they've had complaints filed against them. For the
can check the NAIC's Consumer Information Source (CIS) https://eapps.naic.org/cis/
or call the Arkansas Insurance Department Consumer Services Division at
852-5494. You also might check with the Better Business Bureau
to see if any
consumers have filed complaints - or compliments - about the agents
Strength of the Company - When evaluating a company, you also want to
company financial rating. There are five major rating services. Each
own criteria for rating that uses a combination of qualitative and
numbers to assess the company. Generally, a letter rating from A to F
assigned to the company. Be sure to review how the rating agency
company and understand the rating system.
- References -
When you're applying for a job, you provide references, so don't be
ask a prospective agent for the same.
- Ask Questions
- If you've had a particularly interesting insurance experience, or
of one, ask the agent how they and the company they represent would
with the situation.
- When in Doubt -
If you're not sure what questions to ask or you would like more
guidance on how
to evaluate a potential agent, contact the Arkansas Insurance
Department Consumer Services Division at (800) 852-5494.
Insurance fraud can happen to
anyone, anywhere. Protect
yourself during the purchasing process.
- Answers to Your Questions - If you have any
about the quote or coverages you need, this is the time to ask. If the
can't answer the question, they should offer to find out the answer. An
should never leave a question unanswered prior to your purchase.
- Choices - If you're using an independent agent, you'll
have choices of companies and coverages. Evaluate the options with the
make sure you're choosing the policy best suited to your situation.
- Company Explanation - If the agent doesn't tell you about
the company he/she is placing your coverage with and why that company
best coverage for you, ask why he/she chose that company.
- Honest Sales - You shouldn't feel pressured to choose an
agent, a company or a quote. If an offer seems too good to be true, it
The best way to protect
yourself from insurance fraud is
to research the agent and company you're considering. Always:
writing your check or signing the contract. the
Arkansas Insurance Department Consumer Services Division at (800) 852-5494.
both the agent and company are licensed to write
- Don't give out
any personal information like your Social Security Numbers or bank
over the phone until you have verified the legitimacy of the insurance
- Ask for copies
of all of the paperwork you sign and keep a copy of the payment receipt
check for the initial premium payment you gave the agent for the policy.
- Call the
insurance company if you don't receive a copy of the insurance policy
your coverage and its limitations within 30 days of your purchase.