Agents and insurance companies often require much more information than one would think that they need. This means filling out multiple applications and digging through reports to get information.
So how often should you have to go through the exercise of shopping your insurance?
The first decision that has to be made is which Insurance Agent you want to work with.This has a big impact for a variety of reasons.
There are several types of insurance agents.
- Transactional Agents
- Service Agents
- Consultive Agents
Transactional Agents represent a good portion of insurance agents. These agents are experts in inputting information into a computer to get a quote. What the Insurance Company gives them is what they sell. They seek only to understand your business to a point where they can get the quote. The can quickly shop your insurance coverage with a number of insurance carriers and provide a quick view at the different prices. They generally do not compare coverages nor do they review the policies to identify exclusions that may be detrimental to their clients.
Service Agents try to tailor the Insurance coverages to the clients. They ask questions and review the insurance policies to make sure that everything that was asked for is there. They may even throw in some additional coverages to make sure that the policy meets a minimum coverage threshold that their agency has established as acceptable.
Consultive Agents are there to do just that, Consult. They will generally go through and identify the risks that their clients face and then customize the coverage to that particular client. The agent takes the place as a Trusted Advisor to that client, on par with their Accountant or Legal Team. The agent tends to have Formal Insurance Education and experience that enables them to properly protect and advise the client with respect to the insurance coverage and risk factors that the client faces.
The type of business you have will depend on the type of agent you need.
Once you have determined a good agent who will meet your needs, you can use that agent to shop different Insurance Companies. They will already have most of the information and they can send it out to the different Insurance Companies.
Generally it is not advisable to switch Insurance Companies on an annual basis. A good rule of thumb is to check the markets every two to three years or if there is a rate increase of more than 5% in any one year. That way you can be sure that you are getting the best premium for the amount of Insurance you are getting.
When shopping for insurance, the agent is the most important decision you will make. They can help to get effective coverage that is worth the money that you will spend on the coverage.
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