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It`s hardly astounding but a Consumer Federation of America study reveals that insurance companies that pay higher commissions to agents and brokers usually have higher premiums.
CFA also revealed that higher prices for instant online insure don`t translate into improved service for customers.
"This study proves that consumers should shop very cautiously for coverage," said J. Robert. "The good news is that there are insurance corporations that pay negligible or no commissions, provide low online autos insur costs and give very good customer service."
"However, this research also found abundance of companies where high commissions translate into lofty rates, with no increase in service quality," he claimed. "Good autos assurance rates in addition to service may be found in case customers take the time in order to compare insurance companies."
Findings
Consumer Federation of America (CFA) reviewed commission information from the twenty most popular writers of coverage for both private passenger carinsurance and homeowners insurance. This total commission data combined regular commissions and contingent commissions (paid after insurance policies are sold and depend on unique sales or profitability goals).
The study compared sum commissions with price, insurer profitability and also service quality according to complaint data and consumer satisfaction indices. CFA (Consumer Federation of America) discovered that:
1. Insurance companies which have lower commissions tend to have lower charges. This isn`t always the case, so consumers have to shop cautiously.
2. There`s no evidence that paying higher commissions to an insurance agent or broker produces either better service or higher customer contentment. In fact, there appears to be no correlation between the amount of commission paid and the quality of service rendered.
3. Some insurance firms offer particularly very good deals. Other companies have rates that are constantly high.
In less competitive markets, a number of insurance providers might be tempted to interest market share by proposing higher fees to agents or brokers along with higher prices and, frequently, higher profits for the insurer. Credit coverage is one area where this type of `reverse competition` is particularly prevalent.
Tips for Consumers
We give several tips for consumers shopping for internet car ins:
1. Shop around! This study found that premium charges tend to ascend with commissions, but this isn`t always correct. Consumers have to be sure to get quotes from some of the lowest premium insurance firms, including the direct writers of insurance that regularly don`t disburse commissions.
2. Customers do not need to pay more in order to obtain good service. Several of the insurance firms with the most excellent service records have low costs and low or no commissions. It pays to shop between the insurance providers which have the lowest costs and the highest consumer satisfaction/lowest complaint ratios.
3. In order to get information about autos assurance on-line rates, review state cost information guides. Nearly all the countries have price information guides. Typically, consumers may download these guides from the state`s insurance department Internet site.
4. In order to get grievance information on insurance providers, check in the National Association of Insurance Commissioners` web site, www.naic.org.
5. Beware of going to only one agent or broker for motor vehicle insurence, even in case that insurance agent represents a number of insurance firms. Customers have to be aware that several agents representing more than a single insurance company could put the consumer in a higher priced insurance company which has larger commissions even if the customer meets the requirements for a lower price. States do not oblige insurance agents and brokers to place the client with the best policy for him.
6. Ask insurance agents and brokers the important questions:
Do you represent me or do you act for the insurance corporation you`re recommending me?
What commission are you earning compared to the price of the vehicle assurance on-line plan you`re offering I purchase?
Am I receiving the lowest cost between all the motor vehicles insure firms that you represent for which I qualify?
What other vehicle assurance on-line providers do I meet the criteria for that you act for? What are the prices I would pay at those firms and what commission would you gain with every one of them?
Do you have a contingency commission agreement with the insurer you are recommending? Please fully clarify that agreement to me.
If I have a claim, do you act for me or do you act for the insurance provider in the claim process? Is your compensation in some way related to claims filed by me or other customers of yours?
Seeking about more Female Car Insurance Broker information?
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