Comes this smart tip from the Percy Hoek insurance agency (if you happen to live out on Long Island, New York, or perhaps even a bit further afield, you could do worse than to talk to these folks — one of the nicest, most knowledgeable, hardest-working independent agents I’ve ever run across — 516-589-4100):

“More insurance companies are offering or suggesting you report claims directly to them, not to the agent. It’s easy, but can be costly too.” The problem is: even if your claim proves not to be covered or not to exceed the deductible, your call to the insurer will be “logged.” They didn’t pay out a dime, yet they consider it a smudge on your record. Rack up a few such smudges, and you could see your rate rise or your renewal declined. Whereas if you had called your agent, you would have had these “non-claims” filtered out. A good agent can also provide some help and guidance in making and following through with a claim.

This is not to deny the benefits of dealing with a “direct writer” — insurers like GEICO (which happens to insure my car) that sell direct by phone rather than through agents. You’ll generally get a lower price shopping around and going with a direct writer. But there can be benefits to personal service and guidance as well. If you have more time than money, I’d shop around for a cheap direct writer. If you’re a little further along financially, you may want to establish a relationship with a good independent agent — yet occasionally do reality checks by shopping around on your own. With the Internet, this is likely to get ever easier.

Also, consider that with life insurance, unlike homeowners and auto insurance, you’re not likely to make a lot of claims. So there it’s particularly sensible, if your needs are simple and direct — you’ve got young kids, you need all the coverage you can afford — to shop around yourself for the cheapest term insurance you can find.

Tomorrow: Who Owns Your Life Insurance Policy?


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