Whether you’re looking to buy auto, home, health or life insurance, there are thousands of agents across the country who are more than happy to sell you a policy. But beware: Not all agents are created equal.
Personalities and reputations can range from the stellar to the downright creepy, and it’s important to know how to separate the good from the bad. The difference could mean a lot more than mere dollars and cents.
Consider the June 2011 arrest of 69-year-old Winston Dale Williams of Smyrna, Tenn. Williams, an independent insurance agent, faces felony charges of sexual battery stemming from several visits he made to “a large number of homes” selling various policies for myriad agencies throughout the United States. After a three-week investigation, two alleged victims came forward; police suspect more alleged victims are out there.
Keep in mind that the vast majority of insurance agents and brokers are on the up-and-up. But by adhering to some common-sense measures, you can avoid potentially dangerous pitfalls and develop a solid long-term relationship with a reliable insurance professional.
Punctuality, organization are key
Insurance professionals offer these seven insights into what separates upstanding agents and brokers from the rest:
1.Whether you’ve scheduled a meeting over the phone or in person, experts agree that basic punctuality is the first indicator of the legitimacy of your prospective insurance agent.
“You need to take note of whether or not the agent is on time,” says Scott David Shafran, an independent life and health insurance agent in Ohio. “This is not a trivial matter.”
2.In addition to timeliness, Peter Waldron of Lincoln Financial Advisors Corp. in Northern California says consumers should take note of how clean, organized and generally put together an agent appears.
“If he or she isn'tneat and organized, you can almost guarantee your claim or service requests will be handled in a poor manner,” Waldron says.“I realize this is not extremely important to most people, but it has always been a rule of thumb for me.”
3.Bradford Winton, a financial planner in Pennsylvania, says consumers should be wary of any agent who appears sketchy about compensation. You should be very blunt in asking an agent about his commissions on insurance policies.
“Not only is it a good gauge to see how an agent responds to this question,” Winton says, “but honest agents never hide fees.”
4.To be sure, insurance sales is a competitive business, but D. Zack Barfield, an independent health insurance broker in Georgia with more than 20 years of experience, says you should be wary of any agent who speaks poorly of other insurance companies.
“A good agent will not spread gossip about other agents or companies,” Barfield says.
5.Independent insurance agent Alex Forrest in South Carolina cautions against agents who try to push “some kind of extra hookup or deal.” For example, an agent can’t tell you, “Hey, I’ll give you that Blue Cross health plan for 5 percent less” unless he has tweaked the coverage somehow.
“At the end of the day, as with dealing with anyone, you need to trust your gut,” Forrest says. “If someone is making you uncomfortable or being too pushy, find someone else to deal with. There are plenty of us out there.”
6.Larry Sarraga, a Knights of Columbus insurance agent in New York, says a good agent should be able to explain to you exactly why he's recommending one product over another. At the end of the appointment, you should understand exactly what you're buying and why.
“The words ‘just trust me’ should never come out of the agent's mouth,” Sarraga says.
7. While it’s not always a given that more experience equals better service, seniority should be considered when selecting an agent.
“There are many new agents who think it is easy money and they are usually weeded out by the passage of a few years,” says Steve Zelinger, an estate planning attorney in New Jersey who works closely with insurance and financial professionals. “If an agent has been around for 10 or more years, he or she has either had some success or at least managed to build a decent reputation.”
Where should you meet?
Stories like the one from Tennessee should serve as a cautionary tale against making poor decisions about where to meet a new agent for the first time. There are plenty of good options other than your home, such as an office or a restaurant.
“And I've found that hosting online meetings helps provide some of the benefits of personal meetings without the discomfort, awkwardness and inconvenience of having an in-home meeting,” says Forrest, the South Carolina agent.
Under no circumstances should an agent insist on meeting at your home, says Andrew Friesner, an independent agent in Ohio specializing in individual health insurance and Medicare. An initial phone call or email is perfectly adequate for determining your needs before meeting in person.
Should you choose to meet face-to-face, it’s probably a good idea to not go it alone.
“Here again, a consumer can tell of the agent’s integrity through his or her actions,” says Barfield, the Georgia insurance broker. “I have met with people in all different types of situations, but one thing is for sure, when I meet with a person of the opposite sex, it is either done in public or I ask my wife -- or the client’s husband -- to be in the room during our meeting.”
Even if your gut feels right about an agent, it’s still a good idea to scrutinize the person as thoroughly as possible.
First, ask an agent to provide references from satisfied customers -- something Barfield calls “instant credibility.”
Also, you can check the reputation of an insurance professional through organizations such as the National Association of Health Underwriters, the National Association of Professional Insurance Agents, Independent Insurance Agents & Brokers of America and the Coalition Against Insurance Fraud.
You also can call your state's insurance regulator or visit its website. Online, you can look up an agent's information to ensure that he is properly licensed in your state and that he is authorized to discuss the company he's representing.
Finally, you should prepare a list of questions to ask your prospective agent that covers everything from licensing to whether he or she carries errors-and-omissions coverage (professional liability insurance).
“I actually like when people bring the list,” says Waldron, the Lincoln Financial Advisors representative. “Then I know they are really interested and they want along-term relationship."
Seven ways to avoid trouble
Professionals warn that you should avoid any insurance agent or broker who:
• Claims he can accept cash only.
• Suggests that you can write a check to him personally. A check should be written to an insurance agency or company, not to an individual agent or broker.
• Tells you that he doesn't earn a commission. He’s probably not telling the truth.
• Comes to your door completely uninvited and wants to talk right then and there. In this instance, Shafran says, “you may not have a safe agent."
• Leads you to believe that you're taking advantage of a limited-time offer. Any sales pitch with deadlines attached is generally a bad omen.
• Fails to recommend enough coverage. “In the event of a claim,” Maryland insurance agent Leonard Raskin says, “this could cause great harm.”
• Gives recommendations based solely on the "cheapest" coverage.