Yesterday, I posted about finding auto & home insurance companies with good customer service. Something that can help you get better insurance company customer service, is having a great agent working for you. However, it’s almost 2014, and it’s easier than ever to buy auto & home insurance online, direct from the company. Do you need an insurance agent these days? Buying direct does not always save you money. You should shop with all the major insurance companies in your state, regardless if they have agents or not, to find the companies with the best rates for you. With some insurance companies, you pay the same, whether you buy direct, or from an agent responsible to serve you. This blog post will explain what value insurance agents provide their customers, and how it can cost you money, and be more than just a hassle, if you don’t have one.
Do you need an insurance agent? Do you save money by not having an agent? Whether you save money by not having an agent depends on the insurance companies having the best rates for you. With companies like Allstate, Nationwide, State Farm, Farmers, & American Family, you usually get quoted the same price for the same coverage, whether you buy direct from the company, or through a local agent’s office.
GEICO, best known for selling direct to the public, often has local agent offices in major metro areas of some states, selling its auto insurance at the same price. However, Progressive & Hartford sell direct, and through independent insurance agents, but you can usually get a better price, or additional discounts, by buying direct. Some companies, like Esurance, Amica, Kemper Direct, & USAA, sell insurance direct from the company only. But that does not mean, without agents, these companies will have competitive rates for you.
I have blogged before about the myth of saving money by buying auto insurance direct from the insurance company, because there are no agent commissions to pay. Agent commissions are only one of many marketing expenses for insurance companies, and it can be less expensive to pay an agent a commission, and let the agent take the time & expense to find, service, & keep customers, than to pay for a lot of direct mail, TV, & radio advertising to reach potential customers.
However, insurance companies selling direct to the public, like Progressive, Geico, and Esurance, can’t offer personalized service through a local agent, so they often try to win customers by trying to have the best price.
The last time I shopped, two companies selling directly to the public, and two companies using agents, had the lowest prices for me, all within a range of about $30 difference every 6 months, from the lowest to the highest price. I don’t mention the names of the companies, because the companies with the lowest rates for me, where I live, may have high rates for you, and I don’t want to mislead you into contacting only one or two companies, thinking they have the lowest rates for you.
In my case, the two direct auto insurance companies had the lowest rates. But is it worth an extra $20 every 6 months to have a local agent? Unless you work in the auto insurance business like me, I say, “Absolutely. Yes, it is worth extra money for a good, local agent.”
Although two insurance companies with great reputations for customer service, USAA & Amica, sell directly, and do not have local agents, I have worked at an insurance company’s direct operations, and I have seen some customer service nightmares occur because there was no agent to oversee the account.
When you call an insurance company selling and servicing auto & home insurance through a call center, you may have to wait on hold a long time. Sometimes the insurance company does not manage their call volume well, and if there is a huge storm and many claims, or a staffing shortage, you can literally wait hours on the phone. However, answering the phone quickly is a major goal for insurance companies, and more things can be done through the insurance company website these days. Always answering phone calls quickly is goal insurance company call centers focus on constantly, and many achieve, but at the expense of providing mediocre to terrible customer service.
The people you reach at the insurance company call center won’t be offshore, and most likely US citizens, licensed by your State department of Insurance, but many of them are poorly trained, with little experience, due to high turn over of employees. These employees are often required to rush you off the phone, and move on to the next customer, increasing the chance of them making errors, and not answering your questions to your satisfaction.
As a rule of thumb, NEVER call your insurance company directly, when you have an agent you can contact. Agents and agency staff are not processing 50 policy changes every day, trying to keep the average time on a call to 5 minutes for the 60-80 calls, call center customer service representatives take each day. Agents or their staff are more likely to remember what is going on with your policy, and take the time to make sure you have no problems.
A good agent is invaluable in helping you understand your coverage and fixing problems when they arise, or preventing problems all together.
For example, when I was working at an agency, I processed a policy change for a customer which increased their premium. For some reason, when the change processed, it processed at a higher price than when I input the change. Because I check to see how my policy changes process, I saw the higher premium (it was about $50 more every 6 months than it should be), determined it was an error. I was able to fix it, and get my customer the lower, correct price. If my customer had the same problem calling in the policy change to an insurance company call center, the mistake would not have been noticed. The customer would be unaware they were paying more than they should be paying.
So, keep in mind when you are using my insurance company reviews, a good agent can turn a mediocre insurance company into a great customer experience for the agent’s clients.
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