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UPDATED: Mar 13, 2020
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You can’t travel far in most cities without coming across an insurance agency. Although not as vital as they once were, insurance agencies still play an important role in communities, and they’re still the primary way that many people get insurance policies. A good agent can help save you money on your policy and provide an important contact to your insurance world. It’s important to understand the limitations of your agent, though, and learn how to pick the best one for you.
What Do Agents Do?
The primary role of an insurance agent is writing and selling insurance policies. Depending on the agency, the agent may sell only one brand of insurance, or they may broker insurance for several different companies. The job requires state licensing, and a policy sold by an unlicensed agent is not legitimate.
Because they sell so many insurance policies, agents are very familiar with the coverages and discounts offered by the companies they broker. They are often very knowledgeable about finding discounts and securing low rates, and they’ll know how to modify a policy’s coverages to save money without sacrificing protection.
In addition to knowledge of coverages and policies, insurance agents usually have a decent knowledge of claims and other insurance processes. Depending on the agency, the agent may play an integral role in claims processing. For example, State Farm customers report accidents to their agent and handle most claims through the agency. On the other hand, many independent agents may not know much about the claims process at all, and may direct customers toward a different department to handle those questions.
Beyond these services, the role of an agent is to serve as your link to your insurance company. You will pay your premiums through the agent, and the agent will answer any questions you might have. When your policy is due for a renewal, your agent will renew it and guide you through any advisable coverage changes. Some people keep the same agent for many years and develop a working friendship with them.
Do You Need an Agent?
With the help of the Internet, insurance companies have a much easier time than ever of selling policies directly to consumers. It’s easy to purchase a policy online or over the phone, and many people purchase policies without ever leaving their homes. You can get quotes online and comparison shop among multiple different companies without using an agency. Nevertheless, there are some benefits to having an agent:
- You have only one person you need to deal with whenever you have a customer service question or billing issue, so you don’t need to deal with the call center environment every time you have a question
- Some insurance companies sell predominately through agencies, so you might not be able to get a quote from these smaller insurers without using an agent. Some large companies like State Farm also prefer to operate primarily through agencies
- Having an agent makes it easy to ask questions or get answers about insurance questions. As long as the agent is knowledgeable, you can rely on this information to guide you through the often confusing land of insurance.
Many people enjoy the hands-on approach to customer service that agencies provide. This is why some companies that are built on a foundation of direct sales, such as Geico and Progressive, still maintain some agencies.
Choosing a Good Agent
If you decide that you do want an insurance agent, it’s a good idea to do some research on both the agency and your chosen company in advance. It’s not impossible to change agencies after you’ve gotten one, but it may be inconvenient to get all of your paperwork transferred over. A bad agent can also cause some major inconveniences that could be avoided by doing a bit of research.
The most important thing when choosing an insurance agent is to make sure they’re licensed in your state. You can check with the state’s Department of Insurance to make sure that the agency is legitimate. Also make sure to pick an agency that sells the kind of insurance you want to buy. If you already have a company in mind, you’ll want to choose an agent who sells those policies. Otherwise, you might want to pick an agency that services several companies so you can get the best rates.
Finally, choosing a good agent will depend in part on your own gut feeling. You can check for reviews online or ask friends and family for suggestions, but talking to the agent in person will help you decide if this is someone you’ll want to work with. You might want to come armed with free insurance quotes that you’ve found on your own so you can compare notes with the agent and see if they can offer you any better discounts.