5 things that you need to know about your Commissioned Insurance Agent

Although most people refer to insurance agents as “my agent” nothing could be further from the truth. Unless you are the owners of an insurance company, you cannot have an insurance agent. Only insurance companies can. Insurance agents work for and are compensated by the insurance companies who contract with them.

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  1. They are not on your side even when they tell you otherwise – Being an insurance agent has nothing to do with friendship. It has to do with a contractual obligation to represent a particular insurance company as one of its agents. For an agent to maintain his contract with an insurance company, the agent must guarantee a minimum amount of premium annually. Agent relationships are expensive to maintain, so insurance companies only want Agents who produce a good volume of dollars. As a matter of fact, insurance companies refer to their agents as “Producers,” not Agents.
  2. Your claim costs them money – No consumers should ever trust a Commissioned Insurance Agent, as claims of any size adversely affect the Agent’s livelihood.
  3. They do not work for the consumer – Contrary to popular belief insurance agents do not work for or represent consumers.  If they did, they would be called “Consumer’s Agents”. This relationship clearly postures insurance agents to become adversaries of their customer at the worst possible time; after the insured has suffered a loss.
  4. Agents are slowing being put out of business – With the SAVE money ads on TV & online discount insurance companies such as Esurance, the job of the Commissioned Insurance Agent is becoming obsolete.
  5. No Agent represents ALL insurance companies – As insurance agents cannot be commissioned by all companies, they cannot accurately recommend the best policy for any particular customer. Some online applications can provide you with feedback on what the other insurance companies are charging for similar policies, but are they the policies that you need to cover your property. For that, you would need to fill out an RFP.
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