Turning on the television will provide you with floods of insurance companies
during commercial breaks telling you why each insurance company is better than the next. Although at the surface they may seem to offer great services, it is important to find the insurance company that will provide you the best insurance quotes and insurance rates for your lifestyle and insurance needs.
There are multiple forms of insurance you can purchase: life, home, auto, health, flood, pet, etc. Before you can understand how to deal with the insurance companies and insurance agents, you need to understand the different types of companies.
Understanding Insurance Companies
Insurance companies are divided into two types: life insurance companies and general insurance companies. Life insurance sells life insurance policies and general insurance covers the rest of the insurance spectrum in two different lines: standard lines and excess lines. Standard lines are sold directly to individuals and are regulated by state laws. The insurances that fall under this category include auto, home, and business insurance. Excess lines cover risks that are not insured by standard lines and are more flexible insurance types.
The Internet makes it easier to find the right company. When looking for the insurance company to best fits your needs, you should search the Internet and find ratings for each company you want to compare. Some of the comparison factors include the company issued financial instruments and the insurance company’s financial strengths. You need to check the bonds and notes issued by the company. If the insurance company is not financially strong, that lowers its ability to pay claims in time of need.
Dealing with Insurance Agents
You need to make sure you find a good insurance agent who will help you get the best policy possible. You can opt for either an independent agent or a direct agent.
Independent agents, also called brokers, work independently and sell insurance for more than one company. Since independent insurance agents are not bound to a single insurance company, they are able to search the insurance market for an insurance policy with the most coverage available and the insurance rate you can afford.
Direct agents, or captive agents, work
for a single insurance company and can only sell that company’s insurance policies. Even though there may be better insurance policies on the market, they are only able to sell the single policy to you.
Both types of agents work on a type of commission where they receive a percentage of each premium paid, as well as a fee for servicing the policy. Be sure to be careful when working with insurance agents to make sure you buy the insurance policy you need and do not fall into the insurance agent’s trap of trying to sell you more than you need. For example, insurance agents selling life insurance generally receive a higher commission selling whole-life insurance than term life insurance. Even though you may only want term insurance, there is the risk that you will be pressured to purchase whole insurance
When purchasing insurance, be sure to purchase what will fill your needs. If you just bought a new house that is located near a river, be sure to consider flood insurance to protect your home in the event of the river overflowing its banks. Make sure you understand all insurance terms and policy conditions before purchasing your insurance.
Besides taking advantage of the Internet to check the ratings and scores of insurance companies, go to their websites to find insurance quotes to avoid pushy insurance agents. The agents can sometimes convince you that you need to purchase a certain insurance policy at a set length or insurance rate
that you may not need. By finding quotes online, you will be able to do comparison shopping with insurance companies before having to deal with the insurance agents.
You should also make sure to find a financially strong company. In the time of disaster when you may need your claim filed; you want to be sure that the insurance company will be able to pay your claims. A financially strong insurance company will also be around when it is time to make the claim.
With a variety of insurance companies and insurance policies available, you need to be aware of all options before committing to an insurance plan. Be sure that you find the policy right for you and keep an eye open for the best insurance rates and insurance policy coverage available.