Is Insurance a Commodity?

Posted by Dan Seaman

Today an Insurance agent friend of mine told me that he had a prospect refer to insurance as a commodity. Who could blame this guy for saying such a thing? On TV we can buy insurance in a box or from a lizard and even from cartoon high-ranking military personnel. Has the insurance agent become an antiquated thing of the past? Absolutely not! I'll tell you why.

Your agent is an advisor

When protecting your assets, especially your home or business, you need someone to help you make sure you are properly protected. This is an agents job. A good (more on this later) agent can also make cost-saving suggestions to you in the form of multi-policy discounts or deductible amounts. You cannot get this from a website. Not sure how your deductible works? It's okay, in my experience many people aren't. Your agent can help with that.

It's about the relationship

When you purchase insurance from an agent, it's the beginning of a relationship. You now have a face and a name for the person who will help you in the event that you need it. He/she can help guide you through the claim process. In my time as a restoration vendor, I have seen all types of property destruction. Often times it's life altering. I can say unequivocally that an involved agent makes all the difference to a policyholder going through the shock of a property loss.

All agents are not created equally

This may sound a little unconventional, but in my opinion, you should choose your agent before choosing the insurance company. Of course you should do your due diligence and check up on the financial solvency of the company you buy from. But your first line of communication (or at least it should be) in the event of a claim is your agent. Ask for references. One of the best and underutilized source of references is property restoration companies. They can give a well rounded opinion on how agents handle losses. Also, current policyholders can be a great source for references. Most agents are happy to provide the names of happy clients.

Having been closely involved on the repair and mitigation side of many insurance claims, I would recommend that people do all they can to make sure they have an insurance agent that they know and trust. The value and peace of mind they can provide simply cannot be matched by buying insurance from a website.

Categories: Insurance, Insurance Agent

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