I read an article yesterday (trying to stay up-to-date) in Insurance Journal, quoting a study that found “representation by a local agent has increased in importance the most over the past 5 years (45%) compared to other touch points related to insurance.” As many as 38% of shoppers based their decisions on agent recommendations. This tells me that over a third of the population understands the importance of professional advice. Where are you? Let me give you 5 reasons the other 62% of the population should know the importance of a local agent.
#1 Buying Local
Agents are local representatives in your local community. Being involved in the community is important, and many agents sponsor events and charities. This giving back helps on multiple levels. I see agents serving on boards of charitable organizations. This takes time and resources to help the less fortunate. Also, agencies employ several local representatives contributing to the success of the community. Giving jobs to young professionals is a big plus of agencies. All these factors are a win/win for the agent and the community.
Local agencies pay of local taxes which contribute to the success of local government and schools. The money from a local agency stays in the community instead of another area of the state or even another state. Where do you think the call center is for the 800 numbers that are used? Are they in your community?
#2 Agents Care
Being local and knowing you in the community and knowing your family, gives us a better level of empathy. When something bad happens, you want to know that someone cares enough to make it right. You want someone to feel your pain.
Having an agent who cares enough to write the proper protection instead of just writing a policy that doesn’t adequately cover you is another advantage of a local agent. I’ve seen so many examples of malpractice where lower limits are written and would definitely not protect the assets of the client. It is criminal, but when you sign the contract, you are agreeing to these inadequate limits. And unfortunately ignorance is no excuse at claim time. If you have a local agent that you can meet with in person, your odds of getting properly protected are much better.
One great pleasure I have is watching kids grow up while I insure their parents. Those kids become young adults, and then they call me to insure their first home (yes, I am old!). A 1-800 number does not see you as a person in your community. I’ve attended funerals, birthday parties and other important events in the lives of my clients. I’m invested to make certain you are properly protected.
#3 Agents Simplify
Agents can make the complicated insurance contract simple for you. Instead of talking about liability limits, vicarious liability and other confusing language, we can ask simple questions related to your specific situation. Some examples of these questions:
- If you hurt or kill someone in an accident, how big do you want the check to be?
- How long could you pay bills if you were injured?
- How big is your asset base?
- Where is your money saved?
Did you know that in Tennessee, lawsuits cannot access your retirement accounts or any annuities you may have, but they can get to the equity in your home? They can also your garnish wages. Do you want to work the next 20 years for someone else?
#4 Free Advice
Agents can provide information BEFORE you make a decision. I had a great client call yesterday, and we had a 28-minute conversation about renting her home versus selling it. She needed to know all of the options to make an educated decision. What would happen if she just rented it and then realized the insurance was outrageous? Also, did I mention she called my cell phone after 6:00 p.m.? Having access to your local agent is key as well. Do you have their personal cell phone number in case of an accident?
One way an agent an agent can assist you is the selection of your auto deductible. I see $500 and $1000 comprehensive deductibles all of the time. When a car is stolen, or vandalized, or you hit a deer, why would you want to pay a higher amount out of your pocket. The difference in premium is negligible, but the out of pocket expense for you is more. A local agent can explain this to you and advise the better option.
I recently had a client that we wrote $250 comprehensive deductible. I always advise a low comp deductible. One day after work he called the insurance company directly and added a car to his coverage because he didn’t want to bother me after hours. The company rep who didn’t know him, wrote a $500 comp deductible instead of a $250 deductible like he had on his previous car. Last week he hit a big dog who ran in front of his car. Besides being devastated from hitting the dog, the claim cost him $500 out of pocket instead of $250 because he didn’t deal locally. It’s the little things that matter, and it was a $250 lesson for him.
#5 Being There
Local agents can hold your hand through the claims process. We know the routine of the claims process. We can calm you down when it happens. We can tell you what to expect and be there to step in should something not go just right. When something bad happens, wouldn’t a familiar voice on the other end of the phone make you feel better. Talking to someone you know and trust can give you peace of mind. We usually tell our clients what will happen next. I had a call last Saturday morning at 7:30. A client walked out of his hotel room in Atlanta, and his car was gone. He called me immediately. I explained the claims process and told him to call me if he had any questions. I helped him know what to expect and guess what, he had a $250 comp deductible. He thought it was $500, and I reminded him that I advised a lower one. He was happy. Your coverage never matters until a claim occurs, and then it is all that matters. You can’t change coverage after a claim has occurred. Being properly advised on coverage levels and deductibles is key.
Let me say this also. There are great local agents, and there are also bad local agents. You need to ask yourself, am I getting advice or am I talking with an order taker? Are they simply comparing my current coverage or are they asking questions to understand my unique situation? Good agents ask a LOT of questions because there are many things to consider.
Choose your agent wisely. Your entire financial future could depend on it.