Have you ever heard a story from a friend or relative who filed an insurance claim, only to find out that the coverage their agent promised was not there?
Insurance agents can be some of the most important people you’ll ever do business with. They will help you protect your property, your assets, and your finances. The work of an insurance agent has the potential to save you from financial ruin.
You could go through your whole lifetime and not need the services of an attorney. You could live and die and not need an accountant. But you can’t live in “the real world” without insurance agents.
But remember…it’s YOUR responsibility to learn which coverages are right for you.
The best agent is a person who has spent time studying insurance, not a person who is an expert in sales. Most insurance agents of all types are sales people, not insurance experts. Your agent may or may not be an expert in insurance. You’ll have to simply ask your agent what his education level is.
Agents can become experts in insurance by going through continuing education, such as the Certified Property Casualty Underwriter (CPCU) education program. Life insurance agents can achieve the Certified Life Underwriter (CLU) professional designation. There are other designations available to agents, but those two are the most widely accepted educational programs.
Agents in most states also have to complete a state-required number of Continuing Education hours each year in order to maintain their insurance licenses. If they don’t complete the hours, the state cancels their licenses.
An agent has a duty to you, called the “fiduciary duty.” That means that he must keep your financial well-being first in his priorities. If an agent sells you an insurance policy because it has a higher commission than another policy, he has breached his fiduciary duty to you.
Agents usually carry a type of liability insurance called “Errors and Omissions” liability insurance. Errors and Omissions (E&O) is the insurance that covers the agent’s company, or the agent individually, in the event that a policyholder holds the agent responsible for a service he provided, or failed to provide, that did not have the expected or promised results. This protects agents and their clerical staff from liability due to negligent acts, errors and omissions while conducting their business. It will protect the agent from problems like the following examples:
1. loss of client data. The agent simply loses your file, physically or electronically.
2. system or software failure. Computer at the agent’s office crashes and all data is lost.
3. negligent oversell. The agent sells you coverage you don’t need, or sells you coverage limits higher than necessary.
4. claims of non-performance. This is a broad category but needs to be. This could include charges that an agent did not sell the proper policy, or the proper amount of coverage.
In the next article, learn how to get an insurance analysis.
By Being Latino Contributor, Russel D. Longcore. Russell is a Claims Consultant in Marietta, Georgia. He can be reached at www.ClaimSecrets.com or at russlongcore at gmail dot com.