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Why use an independent insurance agent

Think you're saving money buying insurance on-line? Think Again.

Why Use An Independent Insurance Agent?

Debbie Cooke

President of Brew City Insurance 9/9/2014

About Us

At Brew City Insurance it is our mission to offer customers a truly exceptional insurance buying experience. We provide our customers with the knowledge to choose the best possible insurance products that fulfill their wants and needs. Our friendly, knowledgeable and professional staff will help inspire, problem-solve, and best of all EDUCATE our customers so they can choose the coverage that best fits at a reasonable price.

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While you may think you are saving money by going to an on-line insurance company, that typically is not the case. In truth, by dealing direct with an insurance company, a consumer takes on a level of risk that they may not realize even exists and likely save little to no money.

In this day and age there are plenty of “direct writer” insurance companies out there. These companies claim to cut out the middle-man by selling direct to you, rather than through an agent.

Generally speaking, when you buy a product direct you cut out “the middleman” - a PRODUCT retailer buys wholesale from a manufacturer, then they mark up the product’s price and sell it to you.

Makes sense right? Well insurance just does not work that way.

Back In Our Parents Day

Traditionally, insurance companies did not sell to the public. Instead their products were offered to consumers by agents who are professionally licensed by the state to deal directly with the public. Consumers actually pay the agent nothing because it is the insurance company who pay the agent a commission, and this commission is not added to the retail price.

The Internet Strikes Again

The agency system is alive and well throughout the U.S. You can find dozens if not hundreds of local independent agents in your telephone book or internet guide. However, thanks to the internet you can also go directly to many insurance companies and get a quote. If you like the quote you can often buy a policy by filling out a few more forms, right on the spot. HOWEVER, these insurance companies make MORE this way by charging you the same premium as if you went through a local agent. And now you have to call a 1-800 number and pray you get someone sympathetic to your problems should things go wrong (how has THAT worked for you over the years hmmm?).

Even though the agent is paid by the insurance company, they work for you

The insurance agent is actually your legal representative to the insurance company. The agent is licensed by your state and carries with them the fiduciary responsibility to be your advocate. They must put your interests first over and above the insurance company. So

instead of getting an automated phone service that then connects you to an off-shore call center, (that could care less about you or you problems) you have an actual person in your community that will deal with the insurance company for you.

An independent agent can do important things for you:

  1. Agents have at their disposal the ability to quickly check prices and coverages with dozens - if not hundreds - of different insurance companies. Since rates vary widely an independent agent can very likely get you a better deal than you can get for yourself. They can even get you insurance from a ‘direct writer’ like you could get for yourself.
  2. Independent agents are a one-stop-shop for all of your insurance needs. An agent typically doesn’t sell just auto insurance. They also sell homeowners, renters, health and life insurance, business insurance etc. Use them - at no

    cost to yourself - to handle all of your insurance in one place.

Your rates go up? You can call and have your agent shop you around to look for cheaper rates!

Insurance, to say the very least, is a complicated subject.

Its an agent’s business to understand it, and communicate it to you so you understand it as well. In almost all cases an ordinary consumer will benefit from having someone who deals with this subject for a living advise them on a 50+ page contract. If there are any hidden surprises, a licensed agent is the one equipped to know where they are. Even if you understand insurance thoroughly you can get tripped up: The industry is regulated on a state-by-state basis. Move from one state to another and you’ll find that the coverages may look the same at first glance, but on closer examination things work a bit differently (very differently, in some states).

Coverages don’t just vary from state to state. they vary from company to company within the same state.

Many companies use what are known as ‘manuscript’ policy forms (form = contract in insurance jargon). These forms don’t necessarily use industry-standard wording and may contain altered provisions that materially affect you in some way. some unknown way if you don’t have an expert adviser who is already familiar with a particular policy’s quirks.

The above is the good news with regard to what an agent can do for you. What about the bad news?

Even the bad news has some good news inside of it for the consumer: If an agent makes a mistake (such as selling you an insurance policy that is supposed to meet your needs but doesn’t), that agent may well be liable to you for malpractice; something known in the industry as Errors & Omissions. Your insurance agent has an Errors & Omissions insurance policy, just like a surgeon has a malpractice insurance policy. Your lawyer can file suit against the agent - and their malpractice insurance - to recover damages you suffer as a result of a failure to act properly in your interests. Its no fun to think about for the agent or the consumer, but as unpleasant as it is for all concerned, this is a layer of protection that a consumer enjoys when working with an agent.

Which brings us to another problem that you create when you go direct.

You have no licensed, regulated insured agent acting on your behalf. You are now taking full responsibility for your coverage decisions, and for any mistakes you may make. No more safety net.

Bottom Line

If you deal with an independent agent, there are certain services and protections you are going to get that a direct-writer insurance company simply cannot provide. Worst of all if you go direct

it likely will save you little to nothing

and your financial heath could be at risk.

When shopping around for any insurance, Brew City Insurance is a great place to start..

Brew City Insurance has access to several major companies. We are able to run you through a rating service and find which company offers the best coverage at a premium to best meet your needs. There are several Wisconsin based insurance companies who do not advertise on TV, radio and therefore have lower premiums. And you will still have the convenience of the high quality personal service we offer instead of a 1-800 number and a call center somewhere overseas.

Brew City Insurance Agency Inc. is located in South Milwaukee between Pick N Save and Walgreens at 2937 S Chicago Ave. Stop in today and see what we can do for you! Or call 414-762-6600 and we can quote you right over the phone.

Category: Insurance

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