By Gary Stephenson, AIE, AIRC

Buying insurance should begin with the basics: a licensed agent, a policy and a company that meets your coverage and service needs. Choosing a trustworthy insurance agent is very important as the agent will help you purchase insurance products that will provide protection for your health, assets, and perhaps your retirement. It’s best to choose your agent carefully and take time with the decision.

Using the following four-step approach will help you make a sound decision:

First, make sure your agent is licensed. Visit DC Department of Insurance, Securities and Banking (DISB)’s website at disb.dc.gov if you are not sure.

Second, you may want to find out if DISB has received complaints about the agent in question. You may receive this type of information also from DISB.

Third, ask the agents what kind of service you can expect from them. Will they regularly evaluate your insurance needs? Will they help when it’s time to make a claim?

Finally, keep in mind that the agents work on a commission basis for the insurance companies they represent. Legally, they do not work for consumers.

Now that you have found the right agent, how do you decide which company is right for you? Most people base their decision on benefits or price (premium). While the price you pay is important, buying the cheapest policy is not necessarily a good idea. Insurance that sounds too good to be true, probably is! However, considering only benefits could result in paying a higher than necessary premium. You may also want to find out if DISB has received complaints about the company in question. This information can also be obtained at the above phone number.

Consumers should consider all of the following when choosing a company and a policy:
Premium, benefits, including any coverage exclusions or limitations; service (what’s involved in making a claim?); retention (how easily can you be canceled?); financial strength and reliability of the company; and company management philosophy toward service and claims.

If you do your homework carefully, it will not be a difficult task to find an insurance professional who will be able to assist you in purchasing the insurance protection best suited for your specific needs from a reputable insurance company.

Gary Stephenson, AIE, AIRC, is an insurance examiner in the Market Conduct Division of the Insurance Bureau.