How to choose an Insurance Agent

Most people also have more confidence in their insurance agent than any other type of financial professional, a survey revealed. This is because people put a lot of effort into finding the right agent. And, they should. Your insurance agent is in charge of protecting your most valuable personal assets.

But enough babble: where to begin?

First, you need to understand the differences between the various types of agents. Many people do not realize that there are three primary sources for personal insurance, and it does make a difference whom you buy from. The premium rate you'll have to pay is set by the insurance company itself, and it cannot be changed by the agent. The price you pay for a given product will be the same no matter where you buy it. HOWEVER, a good agent can create an insurance package that may cover less or more than you'd thought of, and those prices can vary. Basically, there are three types of agents:

Captive Agents: these are agents who can sell you the policies of one insurance company.

Telephone or Direct Response Representatives: these are agents who offer the policies of one company only over the telephone.

Independent Insurance Agents: these are agents who represent a number of companies and can research these firms' products to find you the right combination of coverage and value.

BUT, no matter what type of insurance agent you choose, you should be aware of a few ways to ensure (no pun intended) that you can trust your agent's advice:

Is this a licensed agent? This is a pretty obvious one, but some overlook it. You want a licensed agent.

Find out how many and what companies the agent represents. If an agent represents a number of insurance companies, he or she has the ability to look for the best policy to fit your unique needs and find the best value for your money, instead of being stuck with only one company's options.

How long has the agency been in business, and how long has the agent been associated with the agency he or she represents? A lot of bouncing around from agency to agency can be a bad sign, though not one that should necessarily steer you clear of him or her.

Has the agent earned any designations signifying that he or she has received advanced training in the business of insurance? Plaques on the wall? Keys to the executive washroom?

Does the agency specialize in insuring a particular type of business or a line of insurance? For instance, if you own a farm, boat, classic car, home business, etc., does the agent have experience in that area? Sometimes insuring these "special" items can be a sticky wicket, and it's a good idea to find an agent that really knows his or her stuff in that particular area.

Did you learn about this agent from someone you trust and respect? Did this person have a good experience with the agent? References are always, always a good way to get the real low-down on someone. No agent looking for business is going to send you away by telling you what a terrible job he or she does. Reference will give you the real dirt.

Can the agent handle all your needs? Can he or she insure your home, auto, life, health, boat, etc.? The convenience of working with one agent for all your needs can be beneficial in a lot of ways. One good agent can see your entire portfolio and make suggestions and offer options that you may not have thought of.

Who will handle your account on a daily basis? If it is not the agent your giving the once-over (and it often isn't) ask to meet the other person. Ask about his or her background, length of service with the agency, etc.

What are your agent's hours? Unfortunately, accidents never seem to happen between 9:00 and 5:00. Can your agent be reached after hours, and how? Find out how claims are handled when the agency is closed.

Ask how the agent perceives his or her role in handling claims, how he or she tracks claims, and what role he or she takes in helping to resolve claims disputes between the customer and insurance company. This is good stuff to know before something awful happens and you need to collect. There is absolutely nothing worse than having to deal with a lot of insurance-induced red tape when you're dealing with a personal crisis.

Ask the agent if he or she will periodically review your policies and shop your coverages around for you. This is a nice perk. Your prices could go down without you knowing it.

Ask about the agent's involvement in the local community. What organizations does he or she belong to? Does he or she serve on any local boards, participate in volunteer activities, etc.? An agent's active involvement in his or her community may translate into a greater commitment to his or her customers. Along those same lines, fine out if this agent is a member of local, state, or national insurance trade organizations. Membership connotes professionalism and a commitment to continuing education in the field of insurance.

These tips should be helpful in helping you find the right agent for you. I know they seem like a lot, but this really is an important decision, especially if you're choosing an agent you think you'll be with for a while. Time spent in finding the right agent for you will definitely pay off in the long run, even if in peace-of-mind rather than dollars. Good luck!