Things you should consider before choosing an Insurance company
Insurance is an intangible asset and that is why it is better to be careful when shopping for insurance policies. A lot of people have got burnt in the past as a result of dealing with the wrong insurance company. In order to avoid this kind of scenario, it is better to take your time and do some proper investigation before settling for any insurance company.
Also, many people make the mistake of relying solely on the opinion of their insurance brokers. Well, that is not a bad thing entirely but you should be aware that most insurance brokers are after their commission, so they probably would just recommend the company that offers them the highest commission.
Therefore, the bulk of the work in choosing an insurance company is on you. You can ask your broker for quotes and recommendations but when it comes to selecting an insurance company to do business with, the major responsibility rests on you. Here are 10 factors to consider when choosing an insurance company for your business-:
1. Independent agent vs. insurance company. As I mentioned, people aren’t always sure who their insurance company is and who their agent is. West Bend’s products are sold by independent insurance agents throughout the Midwest. Not only do they sell our products, they also sell other companies’ products, too, including West Bend’s competitors. The job of the independent agent is to find an insurance company that best fits your insurance needs. This isn’t as easy as it sounds.
To learn more about the benefits of working with an independent insurance agent, check out my blog,“Benefits of an independent insurance agent.”
The insurance company (West Bend) works in partnership with independent agent before and after the policy is sold. The insurance company:
- Determines premium by reviewing suggested coverages identified by your independent agent;
- Mails you a copy of your insurance policy;
- Handles your insurance payments;
- Makes changes to your policy as recommended by your agent or because of a life style change (i.e. new teen driver);
- Provides businesses with loss prevention strategies; and lastly
- Pays claims should a loss occur.
Please note that an insurance policy is a contract. What’s covered and not covered is specified in your policy. Please be sure to read your policy and talk to your independent agent so you know how a future loss may be covered.
2. Company history/reputation. Research the insurance companies you’re interested in. By visiting their websites, you may learn:
- How long they’ve been in business;
- In which states they sell their products;
- Their mission, vision, and values;
- Company leadership;
- Community involvement;
- Types of products they sell; and
- Financial strength.
- It’s unlikely you’ll find a company with only positive reviews. If the information doesn’t answer all your questions or leaves you feeling not quite right about them, research another company. As with other purchasing decisions, you should be comfortable with your decision.
3. Understand the insurance company’s financial strength. If there’s a difficult claim situation, you don’t want to hear your insurance company can’t pay your claim because of its poor financial results. Many insurance companies work with independent rating agencies that review many factors and the financial results in order to assign a letter grade or score. Since 1971, West Bend has been rated A (Excellent) or better by A.M. Best Company which is recognized worldwide as the benchmark for assessing insurers’ financial strength.
To learn more about the independent rating agencies, check out “How to Assess the Financial Strength of an Insurance Company.”
4. Coverage. Select an insurance company that provides appropriate coverage for your personal or business needs.
5. Price. While price should be a consideration when purchasing insurance, it shouldn’t be the only one. Remember the old saying, “You get what you pay for.” There are many reasons why pricing differs between insurance carriers. A lower price may mean you have less coverage. Less coverage means more money out of your pocket when a loss occurs. A lower price may also mean that insurance carrier has entered a new market for them so it may not have the experience another insurer would. Please talk to your agent about the differences.
6. Ease of doing business. Understand how you can interact with an insurance company. Interactions may include:
- Online bill pay;
- Online claim reporting;
- 24/7 customer service;
- Social media platforms;
- Policy changes; and
- Billing questions.
7. Available discounts. Many insurance companies offer discounts. Find out what discounts apply to your situation. For example, West Bend offers discounts for:
- Protective devices;
- Newer and updated homes;
- Specialized construction materials or methods;
- Financial stability;
- Multi-car families;
- Good students; and
- Anti-lock brakes.
8. The power of referrals. Each day we’re inundated with marketing and advertising messages that can be overwhelming. Talk to family, friends, and co-workers to learn about their experiences with an insurance company.