Insurance is a financial product people buy because they need it, not because they want it. The agent who sells and services your policy plays a large part in making sure the insurance fits your needs and your budget. You might need to change your agent at some point even if you want to keep your insurance. An agent might retire, for example, or you might like the company but want a more attentive person to work with. Unless there's a change to your policy, simply switching agents with the same insurance won't get you a better price.
Value of the Agent
Agents can't control the price of your policy, and changing only your servicing agent won't save you money. There are other ways in which finding a new agent at the same company might save you money. Different agents might arrive at different recommendations for how to protect your financial interests using insurance. Switching to a more knowledgeable agent could result in a more personalized plan, saving money by reducing coverage or dropping extras that don’t fit your situation.
Cost of Insurance
Insurance companies are highly regulated. Because of the complexity of the products, most states prohibit insurance companies from negotiating rates on a customer-by-customer basis. Rates are set based on classes of underwriting risk, so two agents at the same company quoting rates for the same policy at the same time will wind up with the same premium. While this helps protect less-knowledgeable customers, it also prevents customers from getting agents to compete with each other on price.
Updating Your Information
Many types of insurance policies renew on a regular basis, providing insurers the opportunity to increase rates, change provisions or drop clients. Insurance companies often introduce new underwriting classes and plan rate schedules to offer new clients different premiums without changing current clients' rates. Some of these rate changes could offer you lower premium payments, but you have to apply for a new policy to get it. Many insurance companies pay a commission to the agent who wrote the initial policy, so many servicing agents will see if product changes could save new clients money on their existing coverage. Saving a client money on existing coverage is an easy way for an agent to write a new policy.
Notes About Changing
There are a number of reasons why you might change your agent while sticking with the same company. If you’re considering changing, look into whether a new agent can service your existing policies. Depending on the type of insurance, even if new policies can save you money there might be other factors to consider. Life insurance policies, for example, often have exclusions that apply during the first two years that would apply again if you have to take out a new policy when changing agents.
Sean Butner has been writing news articles, blog entries and feature pieces since 2005. His articles have appeared on the cover of "The Richland Sandstorm" and "The Palimpsest Files." He is completing graduate coursework in accounting through Texas A&M University-Commerce. He currently advises families on their insurance and financial planning needs.