If an Insurance Agent Says This to You, RunMay 3, 2018
Regardless of the type of insurance you are looking to purchase, it is important that you are doing business with someone who is both knowledgeable about the product and educated about your business. Most importantly, you need to do business with someone whom you can trust.
This might sound strange coming from an insurance agent, but the insurance industry as a whole, along with its agent force, has historically done a pretty good job of reinforcing some of the negative stereotypes that are often assigned to professionals within it. I often joke that we agents rank somewhere slightly above lawyers and slightly below bankers when it comes to public perception. There is a right and wrong way to conduct any business, and when it comes to insurance sales that principle is especially true.
There are some agents out there who are doing things the right way, and with a little effort, you will be able to find which agencies believe in their product and value your patronage. Other times, you’ll need to discern when an insurance agent isn’t the right fit for you. There are several statements that you might hear which should be considered as red flags when you are in the process of “hiring” an insurance agent, but here is the number one thing:
“I guarantee I can save you money.”
Most of the insurance-buying public wants to hear that they will be able to save money on their insurance premiums. So, why should the promise of keeping more cash in your pocket be treated as a red flag?
There is no guarantee, especially up front.
The reason this sales approach is problematic, and should cause you to reevaluate whether you are dealing with the right agent, is two-fold.
First, even if the agent is confident in the competitive pricing of their product, during any initial insurance conversation there is NO way of guaranteeing premium savings before diving into the details of your current coverages and your current pricing.
Secondly, even after the agent looks at your policy, they still will need to obtain a quote from the insurance companies they represent before they can give any absolute guarantees.
For example, with personal auto insurance policies, accidents and violation history can affect premiums by hundreds and even thousands of dollars. Insurance companies’ rates and surcharges are calculated by sophisticated algorithmic formulas and there is no way an agent can accurately predict the impact that individual credit scores, prior insurance claims, or motor vehicle records all have on the final premium.
Paying less doesn’t always equal comparable coverage.
Leading with a money-saving guarantee is a disingenuous hook at best and a manipulative misrepresentation at worst. Additionally, EVERY agent can save you money by simply reducing your coverages and limits. That isn’t providing you with any increased value and could lead to more problems if you find yourself to be underinsured in a claim situation.
You may have paid less, but only because you bought less product. There is also a reasonably good chance that reducing your current policy coverages by the same amounts would save you even more money! It is important to compare apples-to-apples when buying insurance and any coverages changes should be discussed and explained. Exactly where premium savings are coming from is incredibly pertinent to the conversation!
There is nothing wrong with looking for more affordable insurance solutions. But, it is important to understand the way the insurance industry works and how pricing is determined. Being better educated about the product you are buying, as well as the process required to purchase it, can help you to quickly identify the baited hook of premature price saving guarantees from a slick salesman.
If your first conversation with an agent switches to price and savings, the message you should be hearing from them should be along the lines of, “I will do my best to provide you with the most savings and best pricing I can possibly obtain while maintaining or exceeding your current coverage limits.” If you aren’t hearing some version of that message, you haven’t found the right agent yet.
Disclaimer: Information and claims presented in this content are meant for informative, illustrative purposes and should not be considered legally binding.