We all bear the increased insurance premium because the subject of insurance is valuable or, in the case of life insurance, invaluable. So it makes sense to make sure we get value for money and pay only for the insurance coverage that serves the purpose when we need it.

The process begins with knowing how to select the right insurance representative. Unless you are confident in the insurance product you are purchasing, it is generally a good idea to see an experienced insurance representative. This could be through an insurance broker or insurance agent and to ensure that you are making an informed decision about the representative to whom you will entrust the insurance agreement, the following are key questions to ask.

What main services does the representative provide?

A service level agreement is beneficial in these cases, you want to know in advance the value that the representative will add to your insurance. From visiting you to help you understand your business and its risks to informing you about market conditions.

Will you receive information on risk management measures that will positively influence Insurers and thus reduce their insurance costs?

Will the service include claims management and is the representative prepared to handle old or existing cases?

Does the representative have a professional compensation policy?

This is mandatory, especially when the professional provides advice and with the potentially enormous responsibility they may incur for acts or omissions in the performance of their duties, it is crucial that you ask to see evidence of the current level of coverage.

Can the representative access insurance products from the entire market or only a selection of Insurers?

It is common in some countries for an insurance agent to be linked to one or only a few insurance companies. Insurance brokers usually have more leeway. A truthful answer to this question should give you an idea of ​​how competitive the quotes the rep can get are.

Can you contact the representative’s existing customers for referrals?

Most likely, you will get names of customers who are more likely to rate them favorably. Randomly and whenever possible, make discreet inquiries from the list provided. These references, combined with other information obtained, should give a fair idea of ​​the level of service and competence of the company or individual.

What proof of the representative’s credentials can you see?

This would involve questions about your current membership of any association and whether they are regulated by the recognized industry authority.

You need to know the certification that the firm’s management team has and also those of the key personnel who will deal with your case (as well as their experience with insurance for companies related to yours).

Does the representative have a vested interest in any insurance company?

Sometimes asking about a competitor’s insurance representative can provide useful information. It is highly unlikely that a competitor will praise each other highly, but if more than one competitor independently expresses opposing views about their agent or broker, then there is reason to investigate further.

For example, if you are informed that the representative is “on the payroll” of an insurance company, this should definitely be cause for concern. As in any business, insurance companies competing for the patronage of insurance representatives who have a sizeable insurance business sometimes use various means to outwit the competition.

It could be in the form of vacation coupons for totally illegal payments in addition to the usual commission payment, if a broker has been compromised in any way, the level of professionalism is likely to decline.

How is the representative paid for the service?

Most are paid an insurance commission that varies by class of business. It is not a secret payment as some regulatory authorities stipulate that the customer must be informed of the payment.

Therefore, it is important that you establish whether you will be asked to pay for additional services, such as handling old claims.

How does the company rate the insurance companies with which it decides to place risks?

There are some rating agencies that provide information on the major insurance companies. These ratings are not necessarily the sole criteria for basing the decision on whether to place a risk with an insurance company, and these international rating agencies are not fully familiar with developing country markets.

Among other things, when deciding which insurance company to place a risk with, the representative sometimes takes into account your goodwill with a particular insurance company. That representative can take advantage of this relationship in borderline cases to resolve a claim.

In addition to drawing on previous experiences with an insurance company, a good representative will conduct an independent evaluation of the insurance company’s financial records by reviewing its published accounts. You should get a satisfactory answer to this question.

If you are placing your risks through an insurance broker, there are other considerations, as highlighted in another article on the subject.