I have been exposed to insurance since I was a little girl. My father, Jack McBriarty, started McBriarty Insurance Agency on the Milford oval back in 1985 following numerous positions on the company side of insurance for decades. I remember him telling me that being an insurance agent is a secure career given it is something that everyone needs. Though this is true, he could never have imagined that how it was bought and sold would change so dramatically over the next several decades and hence making the role of an agent less obvious.
The uncertainty of exactly what an insurance agency does became very apparent to me during a conversation I had with a recent UNH graduate. She is a young woman who is just beginning a career in insurance. Though she is getting to know the business, she said she spends a lot of time explaining to her friends exactly what insurance agencies do. Though disheartening, it is not surprising given the millions of dollars poured into advertising from direct carriers like Geico, Esurance, General Insurance, etc. These companies promise a quick quote and hundreds of dollars in savings. It is so convenient; her friends often ask why would you need an insurance agent?
5 Reasons Why You Need an Insurance Agent
1. Insurance is complicated: Buying insurance is not like buying a loaf of bread. If you choose poorly you can not return your policy for a refund, but instead risk your entire financial future. This was never more evident to me then when I recently went onto the Geico website to get a quote. I entered a lot of the basic information that we too would ask and then produced a very low quote. My first reaction was "uh-oh" given the lower price; however upon reviewing the quote as a licensed insurance professional I could see the reason for the lower premium which was as follows:
- The system chose the lowest liability limits allowed by state law, not considering the assets I have at risk.
- No collision or comprehensive coverage was selected for any car that did not have a loan, regardless of the age of the vehicle
- No towing, car rental, or gap coverage selected
No one likes to spend more money than necessary, but if you don't know the ramifications of what you are buying and are simply intrigued by price, then you could really put your financial security in jeopardy.
This example only addresses car insurance, what about the more complex policies? What if you are an engineer in Bedford who needs professional liability insurance, or a general contractor from Nashua who has a couple of guys occasionally working for you, do you need NH worker's comp? What if you do work in Massachusetts as well - do you need a separate work comp policy for this? What if you are an Amherst real estate agent who uses your own car while showing homes - is this covered on your personal auto policy? What if you are a Milford homeowner and have a lot of jewelry - is this covered by homeowners insurance?
The bottom line is that you don't know what you don't know so you need someone to provide counsel and advice on how to best protect you, your family and your assets.
2. Choice: There are three ways to purchase insurance:
Direct Writer (like Geico, Esurance, etc.): There is no insurance agency involved and you deal directly with the company. They tout low rates, but this may or may not be the case given how many factors impact premium. This blanket statement is made given the company equates the 15% savings on the commission not paid to an agent; however this is assuming all company rates are the same, which is not the case. A problem with going direct is that you assume all the responsibility in picking your coverage correctly and hope you don't miss out on purchasing a critical coverage. There is also limited choice within the company. If you don't like the rate or coverage, your options are limited to what the company can provide.
Captive Agency (like State Farm or All State): These agencies provide the benefit of counsel by licensed professionals on the coverage needed; however if you don't like the rate or coverage options, the agency only represents the single company. It is a take-it-or-leave-it system.
Independent Agency (like HPM Insurance): These agencies provide the benefit of counsel by licensed professionals on the coverage needed as well as representing numerous insurance companies to meet the needs and budget of the client. Like any business, insurance companies change with time. What may be a great fit for a client today may not be in the future for various reasons. Perhaps there is a new driver on the policy or a recent claim. Each insurance company rates these situations differently so you want to be with an agency that understands the general impact of these factors with various companies, not just one or two. Some companies also have target markets that may change. Perhaps you were originally with a company who wanted to compete in the Bedford and Manchester area and had an attractive rate initially; however losses took a toll and the company begins to increase premiums in these areas. You want an agent that is on top of this so they can move you to a company who is more competitive. This is not possible if with a direct or captive agency.
3. Your advocate:
When you have an independent insurance agency, you have someone looking out for your interests. Independent agents do not work for any specific company so they have the ability to help you objectively through a claim, coverage or billing issue. How far are you going to get, without hiring a lawyer, if you have a serious disagreement with a company and their legal department?
4. Personal Service:
When you have an insurance agency, you typically know exactly who handles your policies. You have a name and face that you can not only speak with, but also get to know to enable an open discussion about your concerns or financial protection goals. You do not call into a phone bank and await the next customer service rep who may or may not give you their extension for the next time you want to call back. With a direct writer, you may be simply a caller in a queue.
5. Your Community Partner:
Most insurance agencies are small businesses within your own community. If there is a major weather event that has caused damage, the agency will be well aware of the situation and can better assist you in getting the help you need whether it is going out directly to the claim site, or suggesting a restoration company to help you begin emergency repairs.
Many agencies also help support the local causes that you and/or our community support whether it is a local food bank like SHARE Outreach of Milford or the Animal Rescue League in Bedford. Shopping local can mean shopping at the farmers market on the weekend, but it can also mean supporting your local insurance agency.
In summary, the role of an insurance agent is not going the way of the dinosaur. Many agencies have just been overwhelmed by the massive marketing budgets of the gigantic insurance companies but it is time agents let the public know exactly what we do given its importance and value. Presented all the facts, we are confident that the insurance agency will remain a vibrant business for years to come, supporting both the consumer and the community.