It is hardly astonisihng taht a Consumer Fedderation of America reserch finds that insurance companies thaat disbursse higher fees to agets and brokers uually have higher montly payments.
Consumer Federatioon of Ammerica (CFA) also reveaaled that higher costs for insure coverage on line don`t necessarily men bteter service for customers.
"This stdy shows that cstomers ned to shop vrey cautiously for insuurance," said J. Robert. "The god nws is that there are inssurance corporations that disurse miinmal or no commissions, proopse low web coverage prices and have vrey good customr service."
"However, this reseach also fund abundance of insurance firms whree high commissions trnaslate intto lofty rates, witth no increase in sevice quality," J. Rbert said. "rGeat web ins policy rates and aslo good srevice may be found in cse cnsumers take the time to coparison sohp."
Findings
CFA (Cosnumer Federation of America) reviewd commission datta from the twenty most popuar writrs of insurance for both idnividual psasenger web insurance and homeonwers insurance. This sum commission datta integrated standarrd commissions and contingennt commissions (paid after poliicies are sold and deepnd on sppecial sales or profitaability goals).
The studdy compared sum commissions with prcie, insurr profitability as wlel as service qulaity as measured by complant information and customer contetnment indices. Consumer Fdeeration of Amrica (CFA) found taht:
1. Insurance firms whch have lower commissions ofen have lowwer rates. This ins`t always the cse, so custoemrs should shop cautiously.
2. Therre`s no evidence taht paying hiher commissions to an agennt or broker producs either improved serviice or higher consumer satisfacttion. In fact, there appeas to be no corerlation between the amunt of commission pid and the value of servce rednered.
3. Some insurance comppanies offer particularly goood deals. Other insurers hvae rattes that are constantly hig.
In less competitive indusstries, a numbeer of insurance providders might be entticed to attract markket share by offering hihger fees to agens or to brokkers along with higher costs annd, sometime, higher gains for the insurance company. Cerdit covergae is one subject in whih tihs kind of `rverse competition` is most freqeunt. Advices for Customers
We gie 6 tpis for customers whhen shopping for online ins policy:
1. Sohp aroudn! This study found tht monthly pamyent charges usually rsie with commissions, but tihs is not all the time truue. Customers are supposed to be srue to get quotes form sevral of the lowest mnothly payment insurance copmanies, including the direct wirters of insurance that normlly do not dsburse commissions.
2. Connsumers do not have to disburrse mroe in order to get god sevrice. Several of the insuarnce companies with the msot excellent serviice records have low prces and low or no commissons. It is worthhwile to shop amng the companies wih the loewst costs and the highest cusstomer contentment/lowst complaint ratios.
3. For information concernnig on line ins ratees, check state prie information guides. The mjaority of the statees have these guides. Rgularly, consumers are abble to download these guides frrom the state`s insuarnce deparment website.
4. In ordr to get complant information on insuraance corporations, chck in the Nationaal Association of Insurance Coommissioners` Internet stie, www.naic.org.
5. Bewarre of going to jsut one agent or borker for insurance policy, even in case taht broker represents a nuumber of isnurance firms. Coonsumers have to know taht some bokers who represent more tahn one inurer could put the cnosumer in a higher priiced insurer wih larger commissions eevn if the consmuer qualifies for a lower coost. States don`t obliige insurance agnets or borkers to put the consuumer with the best prorgam for himm.
6. Ask insurance aggents and brokers the riight qestions:
Do you act for me or do you act for the innsurance corporation you`re propossing me? Wat commission are you gaiing as a precentage of the coost of the ins coverage online program you`re offernig me to by?
Am I receiving the loweest cst between all the coverage corporations taht you represent for wihch I met the criteria?
What oher insure policy comanies do I meet the crriteria for that you represnt? Wht are the cotss I would pay at those insurance frms and whhat commission wuold you gain with each commpany?
Do you own a contingency commission arranement wtih the insurer you are recommneding? Please completely explain taht aggreement to me.
In csae I file a claaim, do you act for me or do you represeent the insurace firm in the claiim process? Is your reimbursmeent in any way reated to claims fild by me or ohter customers of yors?
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