Shop In-Person, On-Line or By Phone
The I.I.I. Offers Tips on How to Effectively Shop for the Best Policy
NEW YORK, Feb. 14, 2005 � Consumers not only have a wide variety of insurance companies to choose from, but a growing number of ways to shop for insurance, according to the Insurance Information Institute (I.I.I.).
With over 2,000 property/casualty insurance companies and 3.8 million licensed insurance agents, the insurance industry is a highly competitive business offering consumers a wide range of choices, says Jeanne M. Salvatore, vice president of consumer affairs for the I.I.I.
�Consumers can shop with an agent or company representative in-person, over the phone and increasingly, on-line,� Salvatore says.
Sales through �captive� agents (a person who works directly for an insurance company) accounted for 66 percent of auto insurance sales and 69 percent of home insurance sales in 2003.
The remainder of the policies were sold through 39,000 independent insurance agencies, which, on average, represent seven insurance companies offering consumers life, health, retirement tools as well as home and auto insurance products, reports the Independent Insurance Agents & Brokers of America (IIABA).
Depending on your personal preference, you can arrange to meet with an agent in person, speak to someone on the telephone or purchase a policy through your professional association, alumnae group and even sometimes through your employer, Salvatore notes.
�The internet has also made shopping for insurance easier than ever before. You can go online and compare prices, as well as read about individual company products and services. This way, you are prepared to have a constructive conversation with insurance agents and company representatives before you decide which policy to buy,� says Salvatore.
According to a recent study by J. D. Power and Associates, those under 30 are increasingly using the internet to shop for insurance. In fact, 42 percent of all shoppers under the age of 30 used the internet to shop for auto insurance compared to 29 percent of all shoppers.
To effectively shop for home and auto insurance, the I.I.I. suggests the following:
Seek out companies with a reputation for good customer service
Ask your friends, relatives and business associates to recommend an agent or company. You can also see if your state insurance department compiles complaint ratios, which compares the number of valid complaints with the companies� share of policies in your state.
After you have narrowed your list of recommended companies and agents, shop around for the best price. Prices for the same policy can vary by hundreds of dollars, so a little time spent on the phone or internet could save you money. Compare the prices of companies who sell their products over the phone, directly through their own agents and those who work with independent agents. If group auto or home is an option, find out how much they would charge for a policy.
Make sure that you are comparing the same amount of coverage. You don�t want to buy a policy from a company because they offer a lower price and then find out the policy provided less coverage.
Get the Policy That�s Right for You
Remember that you are purchasing insurance to provide financial protection in the event of a disaster. Different insurers specialize in different types of risks. For instance, there are insurance policies for older homes, for high net-worth individuals and even those who own unusual collections.
Check for Financial Stability
Make sure that you pick a company that is financially stable. The following companies rate insurers:
A.M. Best, Inc
Moody�s Investor Services
Standard & Poor�s Insurance Rating Services
Be Comfortable with Your Choice
Ultimately, you should feel comfortable with your insurance purchase. Make sure that your agent or company representative will be easy to reach should you have a question or need to file a claim. It is also important that they explain what is in your policy and the various options you have to insure your home and/or car.
Home and auto insurance rates are moderating, according to research conducted by the I.I.I. In 2005, the cost of auto insurance is expected to rise by only 1.5 percent — the smallest increase in five years. Home insurance is expected to increase by only 2.5 percent — the smallest increase in six years.
�While the increase in the cost of home and auto insurance is moderating, some consumers may actually see a decrease in their insurance rates,� says Salvatore. �Those who take steps to maintain their homes have good credit histories and clean driving records are considered a highly desirable risk and may be pleasantly surprised at the competitive rates offered to them by insurers.�
More information on insurance can be found at the I.I.I. website at www.iii.org. There is also a �Find an Insurance Company Tool,� which will provide a random list of insurance companies licensed to sell insurance in your state.