10 Factors to Consider When Choosing Insurance Providers

There’s a reason why the United States insurance industry reached $1.22 trillion in net premiums during 2018 — people want to feel protected. It’s important to feel taken care of by whatever insurance provider you choose.

Unfortunately, choosing insurance providers is easier said than done. The truth is that not all companies and agents provide the same level of service. Finding the right insurance providers depends on what you need from your policies.

So how do you find one that you can feel comfortable with? By following the tips we collected on this list. Let’s get started!

Ten Things to Keep in Mind When Choosing Insurance Providers

There are many things to consider when choosing an insurance provider. Do you go with the biggest, most recognizable company?

Or do you select the smaller, personalized service of an independent agent? Regardless of what type of insurance you’re looking for, these tips will help you find a provider that fits your needs.

1. Choose What Type of Insurance You Need

Before you can begin looking for an insurance company, you need to decide what type of insurance you require. This is important because some providers lump multiple policies into one plan.

Others specialize in one specific type. Generally speaking, all insurance policies can be divided into seven different types. These include the following: life insurance, property insurance, marine insurance, fire insurance, liability insurance, guarantee insurance, and social insurance.

Most of these types of insurance deal with protecting against potential problems. These may be things like a high hospital bill, car accident costs, or an unexpected home fire.

Policyholders pay a premium for a policy that covers some or all of these unforeseen costs. It’s important to remember that life insurance differs from these other policies.

This type of policy is created to protect family members in the case of an unforeseen death. With a life insurance policy, the insurer agrees to pay the policyholder an agreed sum upon their death.

In exchange, the policyholder pays a regular premium. These types of insurance can be both a financial asset and an investment. If you’re interested in how life insurance can be an investment, then look into a straight life policy.

2. Pay Attention to Online Reviews

Online reviews can be a great way to start exploring insurance providers. However, it’s important to approach some of them with a grain of salt. You should first try and distinguish what the review is praising or criticizing.

Reviews can either be directed at an individual, like an agent, or the larger company as a whole.

You should also narrow the parameters of your search. For example, if you’re checking out a local office attached to a national company, then limit your search to local results.

This will help you see the reviews associated with that specific office. If you see a certain trend in bad reviews, then call up their office.

Discuss the reviews with an agent and see how they respond to them. A good provider will do everything they can to alleviate your potential fears with the policy.

3. Direct Agent Versus Independent Agent

It’s important to learn the distinction between a direct agent and an independent agent. A direct agent is also known as a captive agent. They’re called this because they’re essentially tied to one major provider for all of their policies.

In some senses, this is convenient. It allows them to offer policies that are easy to sign up for. They’re also able to squeeze multiple plans into a policy — home, fire, car, boat — whatever they cover.

However, you should realize the limitations of a direct agent. There is no wiggle room with them. They’re simply a messenger for their company, and the company dictates the terms.

If you’re looking to customize your policies, then you’re better off with an independent agent. These agents are beholden to no one company. As such, they’re able to get you the protection you want.

Think of these agents as advisors instead of a salesperson. Independent agents do come with an added percentage fee. However, it’s important to remember that they can also save you money by protecting against predatory policy changes.

4. Look at Their Financial Strength

You want to make sure that your insurance provider will be able to pay you back if you need it. You can determine this by looking at a company’s financial performance. All companies should be able to pay back any potential assets.

So how do you find out a company’s financial strength? By looking at sites like A.M. Best. This type of service gives insurance providers a grade based on their financial strength.

These are ranked on a grade scale — A+ is best, and it decreases from there. Finding a financially stable company will be able to give you the peace of mind you deserve.

5. Decide on Your Price

It’s important to first decide your insurance budget before selecting a plan. If you don’t have much to spend, then you may be tempted to give with the cheapest possible option. However, we would suggest reconsidering if you’re able to.

When it comes to insurance providers you do get what you pay for. This means that cheaper plans come with much less coverage. So, in the event of an accident, it will be much more money out of your pocket at the end of the day.

If money is the deciding factor, then talk to your agent about a flexibility plan. Many companies offer financial services like these. They allow you to work out your premium payments into smaller installments.

6. Choose Where to Buy It

We’ve already mentioned two of the ways you can purchase insurance. One of the ways is with a direct agent or captive agent. You can reach these providers online, over the phone, or in person.

The same goes for independent providers, who offer more customizable plans through multiple companies. However, there is also a third option. Many options now offer plans completely online.

In this case, you don’t go through an agent, you simply sign yourself up. These types of plans are ideal if you want general coverage without going through an unnecessary party.

7. Compare Multiple Companies Online

Once you find a shortlist of potential insurance providers, it’s time to look into each company. Explore the customer feedback on unbiased survey sites. Look for two main things: customer service and the amount of money paid for.

Multiple negative reviews may be a red flag in some cases. You should also pay attention to their history. A company that’s been around for a long time often has more practical experience than new companies.

You should also find a provider with a good mission statement. You want your values to align with the company. After all, in many cases, they’re in charge of your livelihood.

8. Convenience Is Important

Convenience is another important factor when selecting an insurance provider. This means that an agent should be available whenever you need them. After all, you never know when an accident might strike.

It could happen at three in the morning. As such, twenty-four-seven service is important for some policies. It should also be easy to reach your agent.

Larger companies can sometimes pass your case around, which slows down the whole process. Look for one that provides you with individualized attention.

9. Look for Full-Disclosure

Try and look for an insurance provider that seems forthcoming and honest. This may be hard to find, but it’s important to look out for.

Agents that give vague information, or don’t address your concern, are cause for concern. Instead, look for insurance providers that offer full-disclosure on a policy — even the potential bad parts.

10. Make Sure They’re Licensed

It’s important to find an insurance provider that is fully licensed to handle your policy. This might sound obvious, but it can get complicated. Companies need appropriate licenses to operate in each state.

As such, some don’t have access to them. It’s important to keep in mind if you ever move. Make sure your insurance company is still licensed in your new state before proceeding with the policy.

You can find out which companies are licensed for your specific state by calling their state insurance department.

Want More Articles? Keep Exploring

We hope this article taught you some important tips when choosing insurance providers. As we mentioned, the right insurance provider depends on the person.

Do you prefer detailed, hands-on care? Or self-service that you can perform yourself? Once you decide this, then you can begin exploring providers that fit your expectations.

Want more articles on everything from finance to technology? If you answered yes, then you’re in the right place. Keep on reading NewsLo articles to remain up-to-date on the latest news and tips.