by Peter Andersen, 8/13/14
Levitt-Fuirst is an independent insurance agent. Got it? Got it! Wait… What is an independent insurance agent again? Better yet, why would you want an independent insurance agent??? What about that insurance company you see on TV? You know them, with the cute commercials with the memorable characters and the catchy tag lines – why not one of those companies instead of Levitt-Fuirst, or some other independent agent? Good question!
First, let’s clarify the different ways to get insurance.
Direct Writer:
These are the companies you see on TV. They are big, and they sell the insurance that they want to sell at a specific price. They are called “direct writers” because the insurance companies sell their insurance policies directly to the consumer. Some direct writers work primarily through the web or over the phone, while others have “brick and mortar” locations, or agents that are only allowed to write those insurance companies.
Independent Insurance Agents and their Carriers:
On the other end of the spectrum is the independent insurance agent. The concept of an independent insurance agent has been around for a long time, and this agency/carrier model handled a vast majority of the insurance sales in the US for a long long time. The concept is that a licensed insurance professional would contract with various carriers to sell those carrier’s insurance products. The agents, or agencies, are able to offer a wide array of products to their clients, because they are not limited to the “appetite” of one particular carrier. That is, an individual insurance company may say they want to write small shop keepers, but maybe not those shops in the Bronx. Or maybe they want to write construction risks, but maybe not those that involve asbestos or heights. Real Estate? Some love it, but not if it is in the wrong part of town, or near any water… Each insurance carrier must make such “appetite” decisions, but an independent agent can work with a broad group of insurance carriers, so that they can offer a wider range of products. If one carrier won’t write in the Bronx, another will!
Now that we have that cleared up, let’s discuss the role of the insurance agency…
Middle Man vs. Advocate
If you talk to those direct writers, you may hear that they are saving you money by “cutting out the middle man”. There is a grain of truth to this, but it misses the most important point. Let me ask you a question:
Who works for you?
When you buy an insurance policy from a direct writer, you are the consumer, they are the seller. This is a common way of doing business – it is the same as the grocery store, for example. They sell, you buy. Why not for insurance? The answer to the question in this scenario is twofold.
First, insurance is not a carrot – it is complex, it is riddled with insurance specific wording, and it involves a lot of risk if you are not covered for a claim. If a carrot is bad, you can see it. If an insurance policy has terrible exclusions that render it useless for you under some common circumstances, would you know? Complexity requires expertise…
Part two is the advocacy. With those direct writers, nobody is looking out for your interest. They are selling, you are buying. The Independent Agent, however, is different. It is true, we sign contracts with the carrier, but independent agents are officially working FOR the consumer. I don’t know how clear that is out in the world at large, but if you remember one thing, remember this – we work for you! We are licensed by the state in which we sell insurance, and our clients are you, the purchasers of the policy. The carriers are our business partner, but you are our client, and if it comes to a claim or an increase – we fight for you!
My 3 E’s: Experience, Education, Effort
If I had to sum up why you want an independent agent, I would tell you about the 3 E’s…
Experience: Independent agents have been there and done that. We understand what you need, because we have other clients that have needed that before. We know what carriers like the risks you pose, be it personal (home, auto, watercraft, valuable articles, etc…), or business (retail, wholesale, commercial real estate, construction, etc…). When you are looking for a policy, don’t you want to work with someone that has your best interest at heart, and loads of experience with people just like you?
Education: Independent Agents are required to take licensing courses every few years, amounting to tens of hours of training. To become an agent in the first place, we spend literally months in a classroom, after work, on weekends, before work, studying and preparing for the very difficult, comprehensive insurance exams required by the state. If you are going to buy insurance, don’t you want to buy it from the guy that has that education, AND is working for YOU?
Effort: You are our client. We want to keep you as our client, even if you have a claim, even if your circumstances change. Maybe you move to a big place on the water, or your son just got another ticket. It is our job to find an insurance carrier that offers you excellent coverage at a competitive price, even if one carrier non-renews you, or rejects you. What happens if that direct writer gets tired of your shenanigans? No soup for you!
The idea of the middleman gets a bad rap sometimes. When the world is complex, having an expert on your side is nothing to sneeze at. If you are buying a used car, you should have a mechanic you trust check it out. If you are buying a house, you would want an expert do an inspection. When you are buying an engagement ring, getting the diamond appraised is a great idea. And when buying insurance for your most prized possessions or for your most essential business interest? Come to us. We are here for you, and always happy to see you – even if your son DID just get another speeding ticket…
