When you buy insurance, you reveal a lot of personal information to your agent, and every time you make a change in your policy, you'll have another interaction with that same person. You need an agent you feel comfortable with and trust. There are reasons beyond rates for wanting to change agents. That said, changing to another agent in the same company may save you money.
Underwriters and Rates
The broker who sells you insurance has no control over how much you pay for a given amount of coverage. Rates for the same auto insurance, for example, differ only slightly from one major company to another -- less than insurance ads want you to believe. Within one company, the rates for two different customers with identical risk profiles are the same. Your insurance agent is simply quoting a rate set by the insurance underwriter. The underwriter compares extensive histories of data and your personal history, as well as credit score -- except in California, where it's illegal. Your education level, age, marital status and more details are also analyzed to determine the risk you represent. The insurance agent takes your information, but the underwriter's risk assessment determines your rate.
Bad Agents and Good Agents
Since how much you pay for a given amount and kind of insurance coverage isn't determined by your agent, you may wonder how changing agents within the same company can possibly save you money. Actually, going from a bad agent, who's just trying to collect the maximum commission on the current transaction, to a good agent, who's interested in establishing a long-term relationship, can save you a lot of money.
Many auto insurance companies give discounts for such things as prior military service, attendance at driving schools and driver's education, membership in AAA, working out of a home office and more. For homeowners or renters insurance, discounts are available for fire sprinklers, smoke and fire detectors and nonflammable construction. You probably don't know all the discounts that are available for your insurance needs, but a good agent does. She'll ask you questions that help her identify discounts that save you money.
The Insurance You Need
Some insurance agents sell the same policy over and over. But when you're starting out in life, you generally don't have a lot of assets, so you don't need as much liability coverage as you will later in life, when you may have substantial assets. A good agent matches your liability coverage to your assets, and a bad agent probably doesn't. Another area where you can save money is in the amount of your deductible -- the amount you pay before your insurance coverage kicks in. A bad agent may try to sell you a policy with a low deductible, which is costly, while a good agent will tailor your deductible to your economic situation.
Patrick Gleeson received a doctorate in 18th century English literature at the University of Washington. He served as a professor of English at the University of Victoria and was head of freshman English at San Francisco State University. Gleeson is the director of technical publications for McClarie Group and manages an investment fund. He is a Registered Investment Advisor.