Your Insurance Agent Is a VIP (Vital Insurance Partner)

My friend Howard Candage taught me that the most important part of the insurance transaction is the relationship an insurance buyer has with his or her insurance agent. Having the right agent is critical to a successful insurance program. There has to be trust and respect between the two parties.

Your relationship with your agent has to be as trusting as the relationship you have with your lawyer or accountant.

Insurance agents can be either employees of the insurance company for whom they sell (called direct writers) or independent business people who work for themselves. Independent agents usually represent more than one insurance company. While each will tell you that his or her approach is best, I find that both independent agents and direct writers have a place in the market.

Most community banks do business with independent agents. Often it’s an agent from the community. No two agencies have the same abilities or resources. No two agents have the same level of knowledge and expertise.

When the chips are down, your agent can make all the difference in a claim or coverage dispute. Make sure that your agent can meet your needs. Here are some questions as you review an agent’s services:

– Who will manage your account on a daily basis?

– How long have the producer and service people been in the insurance business?

– Will the agent provide advice on all aspects of bank insurance?

– Does the agency have special expertise in banks and financial institutions?

– How are claims handled? Does the agency have a claims department?

– Will one person in the agency oversee claim incident reports?

– Who will provide help preventing losses—the agent, the insurer, or both?

It is common for banks to buy insurance from an agent who is a customer of the bank. Many banks use several agents to “spread the wealth.” I’ve worked with banks where one agent handles the property insurance, another handles auto insurance, and still another handles directors’ and officers’ insurance. Consider this strategy carefully. You may be opening yourself up to misunderstandings in terms of exposure and coverage. In such a setup, one agent may not know what coverage the other agents are providing. If you are going to work with multiple agents, consider building a list of coverages showing all policies. Share the list with all your agents so each knows what the others are doing.

My recommendation is usually that a business should have one insurance agent handle all the property and casualty insurance needs.