Q: I JUST bought a new house and wanted to make sure that it is completely insured. I was told to get an insurance agent who can inform me about the correct coverage to get. I don’t know any insurance agent. When I got my car, I myself bought the insurance online. But insuring a house might be more complicated and I don’t want to make a mistake. However, I also heard that there are agents who might be only after commissions and not take care of my interests. What do I do?
A: Obtaining the services of a trustworthy insurance agent is helpful. If you have only dealt with automobile insurance companies, you will need a lot more information and evaluation than can be found in a diligent online search. The agent can advise you on the appropriate coverages to obtain tailored to your specific situation.
To get started, it might be useful to first determine what kinds of “agents” (or “producers” as agents and brokers are collectively known) are out there. The kinds of agents available will depend on the insurance company’s method of distribution of its insurance products and services. Sometimes, an insurance company may sell its products directly through its employees, which means it does not use agents or brokers.
If the insurance company uses agents or brokers, then the following are the types of agents used:
1) Captive Agents – They represent a single insurance company. They submit their business only to the company they represent or, at least, give that company first refusal rights on a sale.
2) Independent Agents – This is a contractor who represents different insurance companies. They have to be appointed by each insurance company they represent before they can place coverage with that company. Because they represent several insurance companies at once, they may be familiar with several insurance products and may be in a better position to compare and contrast such products. However, since they have to be appointed by an insurance company, they may represent the insurance company’s or their own interests first rather than the client’s.
3) Insurance Brokers – Brokers are not appointed to represent any insurance company. They are independent insurance sales persons who search for insurance products in the interests of their clients. They may place coverage with any insurance company admitted into the State of California. Since brokers are not appointed to represent specific insurance companies, insurance companies to whom they place coverage can deny liability for any broker negligence. Consumers, therefore, should deal with well-established brokers who carry professional liability policies.
After determining what type of agent one is most comfortable with, one can begin to find out which agents to contact. One may start with any of the following:
Personal Recommendations: Ask family, co-workers, or friends. If they know anyone, they will more likely refer someone whose knowledge, expertise and service they have been satisfied with.
Online Testimonials: Search online and browse through social media to determine what kind of web presence an agent or broker has and what type of service they offer. Clients, both satisfied and unsatisfied, may leave comments worth considering.
Department of Insurance: This state agency keeps track of insurance companies, agents and brokers doing business in the state of California. If you have already found an agent or broker elsewhere, it is always advisable to check the agent’s or broker’s license status with the Dept. of Insurance’s website, using the agent’s or broker’s name or license number. This is a good way to find out their licensing history, the types of insurance they sell, the insurance companies that have appointed them, their continuing education, and certifications, if any.
Personally Meeting an Agent: Meeting with an agent or broker personally is a good way to determine whether the agent or broker will be a good fit for you and your needs.
In California, all insurance agents and brokers must display their license number on their business cards and any marketing material they give you concerning the insurance products they sell.
Next week, we will discuss some important questions that you can ask your insurance agent/broker, as well as other tips to make insuring your property as painless as possible.
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C. Joe Sayas, Jr., Esq. is an experienced trial attorney who has successfully obtained significant results, including several million dollar recoveries for consumers against insurance companies and big business. He is a member of the Million Dollar-Advocates Forum—a prestigious group of trial lawyers whose membership is limited to those who have demonstrated exceptional skill, experience and excellence in advocacy. He has been featured in the cover of Los Angeles Daily Journal’s Verdicts and Settlements for his professional accomplishments and recipient of numerous awards from community and media organizations. His litigation practice concentrates in the following areas: serious personal injuries, wrongful death, insurance claims, unfair business practices, wage and hour (overtime) litigation. You can visit his website at www.joesayas law.com or contact his office by telephone at (818) 291-0088.
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