Insurance secrets that we should not keep

by Kristina on May 15, 2013 · 2 comments

Good morning Dinks. So often we talk about how to save money, how to spend money wisely, how to invest our money and how to live on a budget. But today I would like to discuss insurance.

When I first moved away from home I purchased my home and auto insurance with my financial institution because I didn’t know any better. I didn’t know that I should shop around and look for the best home and auto insurance rates.  I didn’t know that I could do business with a new company, or at least I didn’t try to because I didn’t want to get out of my comfort zone.

When I was a child I remember my parent’s insurance agent coming to our home and sitting at our kitchen table as my parents revised their home, auto and life insurance policies. Whatever happened to that kind of personal service? Now everything is done online or by telephone and there is just no more personal service in personal finance.

I love reading posts about other people’s experiences with their bank and with their insurance company, not matter how good or bad they may be.  When people post rants about being overcharged and receiving poor service I don’t think of it as something negative, I actually think it’s a positive warning for future buyers to beware. Andrea at So Over This  featured several posts about her horrible experience with ADT and trust me, I will think twice about using their services in the future.

MSN recently published an article titled 5 things your insurance agent isn’t telling you and I feel the need to share because we could all be making these costly mistakes. Here are a few things that you should know about your insurance agent.

– Be careful what you say. My father always told me that the less we say the better and MSN agrees. They advise insurance clients to watch their language when filing a claim with their insurance agency. Using the wrong word or exaggerating the damage with every day phrases can harm the chances of having your insurance claim approved.

– Your insurance agent is working on commission. This is not to say that your insurance agent does not have your best interest at heart, but if you feel your agent is being too pushy you are probably right. Insurance agents don’t always declare their commission because of the stigma that comes along with commissioned employees. However, the truth is that most financial employees and probably all sales people are working for some type of commission. The best way to make sure you are getting the best deal is to do your own research and know what type of insurance coverage you need before you contact an insurance agent.

– You don’t have to be a new customer to earn money.  Many insurance agents will offer existing clients the option to increase their coverage and switch policies because they still earn a commission when you buy new insurance products and services even if you are already an existing client.  If your insurance agent proposes a new product I suggest that you take the advice into consideration and do some research on your own before you agree to any changes and sign any documents.

Photo by sashafatcat

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{ 2 comments… read them below or add one }

1 DC @ Young Adult Money May 15, 2013 at 8:24 am

Great points. I use State Farm Insurance even though I am fairly certain I could get a better rate somewhere else. The difference is the customer service. Our agent goes above and beyond in this aspect and will respond quickly to emails, even on the weekends. If she is out of town she has a backup who will respond. It’s really stellar service.

2 Jake Erickson May 15, 2013 at 10:10 am

These are great tips. I have a family friend who does ours and he has gotten us some pretty good rates. Even though he is a family friend, we still shopped around a bit just to make sure the rates were competitive. Insurance can be one of the biggest ripoffs, but with a little research you can save quite a bit of money for the same product.

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