The selection of an insurance agent is one of the most important decisions any policyholder can make. You trust the person to determine the best coverage for you at the best price. An excellent insurance agent is one who fully understands your life circumstances and is able to guide you in the selection of policies that help reduce your risk of financial calamity. Different people and different businesses require different types of agents. Accordingly, what may be the best agent for one is not necessarily right for the next.

Over the next few posts, I am going to explore the topic of how to choose an insurance agent. I thought I would start with four steps outlined in PayUp!:

First, check their credentials. You want an agent who has gone above and beyond to learn the trade. In most states, getting licensed as an agent is as simple as taking a short course, typically only six to eight weeks long, passing a test, and getting a surety bond. Look for something more. There are Certified Insurance Counselors (CICs), Chartered Property and Casualty Underwriters (CPCUs), agents with Associate in Risk Management (ARM) degrees, Accredited Advisors on Insurance (AAIs), and more.

You will need to do some research to find out what credentials agents working your locale and area of insurance should have. Because these credentials might be numerous and confusing, consider consulting independent bodies that vet and certify agents, such as Trusted Choice, which operates across the nation. These organizations can help you find reputable agents with the right credentials.

Second, seek out agents who are involved in professional organizations. Large businesses should seek out agents in positions of leadership in the insurance agent profession. Find the major insurance associations in your state and see who is on the board of directors. These people will be leaders in the field and command the respect of their colleagues and peers. They are usually extremely knowledgeable. You may not need a leader in the field just to buy a homeowners insurance policy, but businesses or people who need extremely large policies should consider looking for the top agents in their area.

Third, look for agents who specialize in the type of insurance you need. Some agents specialize in business insurance, while others sell individual policies. Health insurance is different from life insurance, and business insurance is different from homeowners insurance. Most agencies have specialists in different fields. Find an agent who works in the type of insurance you need and who understands the area. For example, art collectors shouldn’t just get any property insurance agent—they should find one with experience insuring collectibles and fine art.

Fourth, get the right type of agent for you. Most people looking for individual property insurance can go to an independent agent at a small agency. However, very affluent people might want to seek out risk managers who can craft a customized insurance package to meet unusual and complex needs. They can help affluent people cover things like private jets or boats. Likewise, while small businesses can go to a smaller agency, large corporations should seek out large agencies and brokers that cater to their industry. The more complex your insurance needs, the more experienced and specialized your agent or team of agents should be.

Of course, when I ask insurance agents if this is sound advice, I get differing opinions. I will explore how agents view themselves tomorrow.

Thought For The Day

Research is formalized curiosity. It is poking and prying with a purpose.

—Zora Neale Hurston