By Richard Paton, Boston MA
Insurance can be a confusing topic for anyone, and the process of purchasing insurance or going through the process of filing an insurance claim can be an overwhelming ordeal. It is best in these situations to be able to consult with people that have experience and who can offer sound advice. Insurance agents and brokers are a good place to start. Personal attorneys and your financial advisor can also give good advice on how to structure your coverage limits for the best risk management strategy. Your own state insurance department will usually have a wide range of helpful information available as well.
An insurance agent is a representative of one or more insurance companies. They are paid sales people that are in the position of marketing different policies to insurance customers. In most cases, agents are paid by commission based on a percentage of new business they can bring to an insurance company. An insurance agent will be able to give good, specific advice with respect to coverage and insurance products and is one of the best resources for advice. Bear in mind however that an insurance agent’s role is merely administrative. It is their job to make sure that paperwork is filed timely and correctly. They have no duty to advise you correctly, but in many cases they do have a wealth of knowledge to share.
An insurance broker is quite similar to an insurance agent in that they can represent one, or several different companies. A broker is generally said to have a higher duty to an insured and carries more responsibility for giving good advice to an insured. They are generally required to give good and proper advice regarding coverage decisions and product purchases. Because they have a higher duty, insurance brokers often have more education in insurance than independent insurance agents do. Because they have a higher duty to an insured, and because they are required to have a broader insurance related education, they generally cost more than an insurance agent.
Your personal attorney may be a good resource for insurance advice as well. While they may or may not have a sound understanding of insurance coverages, they are more likely to have a good understands of the risks in general that you face. With this knowledge your personal attorney should be able to provide good advice regarding what types of losses you should be insured against and how much coverage you may need.
A financial planner is a person who should be extremely familiar with your financial circumstances and what you stand to lose in the event of some casualty loss. For this reason, a financial planner will be able to provide you with good information on what types of coverage you should have and what kind of protection is needed for your assets.
Each state has its own insurance regulations, which vary considerably from one state to the next. Your state’s insurance Department will likely have a wealth of information available to you that can help to guide you through the process of purchasing an insurance policy. It can also offer guidance as to any required insurance, specific to auto insurance requirements and minimum limits. You can also learn about your rights as a policyholder and insurance consumer.
Those who are very familiar with the ins and outs of insurance policies have usually had a strong background in the insurance industry and many years of experience and education to gain knowledge and insight that most people won’t have. It is important that you speak with people like this before making important insurance decisions. Learning as much as you can about your coverage and how it could affect you will ensure that you get the best value when purchasing an insurance policy.
