Because insurance is important, or in the case life insurance, because it’s valuable, we all have to put up with the rising premiums. It makes sense to make sure we get the best value for our money and only pay for what we actually need.
It all starts with choosing the right representative. It is a good idea not to be completely confident about the product that you are purchasing. You can do this through an insurance broker, or an agent. To ensure that you make an informed decision about the representative you choose to trust with your insurance arrangements, here are some key questions.
What primary services does this representative offer?
In these situations, a service level agreement can be beneficial. You want to know upfront what the representative will bring to your insurance. From visiting you to understand your business and risk to informing about market conditions.
Do you expect to be provided with information about risk management strategies that positively impact the Insurers, and therefore reduce your insurance cost?
Is the representative available to handle old/existing cases and will the service include claim management?
Is there a Professional Indemnity Policy in place for the representative?
This is especially important when the professional is giving advice. With the potential for huge liability they could incur due to acts or omissions in the performance of their duties, it is vital that you ask for evidence of the coverage in place.
Can the representative access all insurance products on the market or just select Insurers?
In some countries, it is not uncommon for an insurance agent in a country to be tied to only one or a few insurance companies. Insurance brokers have more flexibility. This question will give you an idea about how competitive the quotes that the representative can obtain.
Can you contact existing clients to get a reference number?
Most likely, you will get the names of clients who are most likely to rate them favorably. Randomly, and where possible, make discrete inquiries from the provided list. This information, along with any other information, should provide a fair indication of the service and competence of the individual or firm.
Which proof of the representative’s credentials can you see?
This would include questions about their current membership in any association, and whether or not they are regulated under the authority of the industry.
It is important to find out what certifications the management team holds and those of key staff members who will be handling your case (as also their experience with insurances that are similar to yours).
Is the representative a shareholder in an insurance company?
Sometimes, it can be useful to inquire about the insurance representative of a competitor. Although it is unlikely for a competitor to praise you, it is possible for one of them to express negative opinions about your broker or agent.
If you’re told that a representative is on the payroll of an insurance company this should be cause for concern. Insurance companies, like any other business, are always looking for customers. They may use different methods to beat the competition.
This could take the form of holiday vouchers or even illegal payments. If a broker is compromised in any way, professionalism will likely decrease.
What is the compensation for the service rendered by the representative?
Insurance commissions are paid to most people. They vary depending on the business type. The payment is not secret, as certain regulatory authorities require that the client be made aware of it.
You should also determine whether additional services, such as the management of old claims, will be necessary.
How does the company rate the insurance companies with which they place risk?
A few rating agencies provide information on the most prominent insurance companies. These ratings are not the only criteria to use when deciding whether to take on a risk with an insurer.
The representative may consider its relationship with the insurance company when deciding which company to place a claim with. This representative can leverage this relationship in borderline situations to settle a claim.
A good representative will not only rely on past experiences with an insurer, but also conduct an independent assessment of the financial records by looking at the published accounts. This question should be answered satisfactorily.
