15 Things You’ll Want to Do Before Selecting an Insurance Agent
You’re a member of your community association’s board, and it’s time to review your current insurance policies and providers. While it may be tempting to maintain your current relationship, you may find that significant savings can be found when you shop around.
But this is scary, right? Well, maybe just a little. If you’re lucky enough to have the best community association management company, they can help. But if you’re flying the decision solo, just follow these steps and you’re likely to arrive at an agent and a policy that saves you money without sacrificing coverage.
1. Assess the agent’s association experience.You’ll want to partner with an agent and a company with demonstrated experience in the community association arena. This experience should be recent, and comparable to the size and type of association you live in. It’s important that your agent have access to the right insurance carriers for your property and is able to generate proposals from multiple carriers for your property – two or more is ideal.
2. Make sure the agent understands your needs – and your laws.Your agent should have a thorough understanding of your association and your community, including its layout, values, operations, documents, special characteristics and insurance history. More broadly speaking, your potential new agent should also understand your state’s community association laws and be thoroughly familiar with the community association market.
3. Define whether your agent is selling or consulting.There’s a big difference. A true insurance consultant will strive to understand your wants and needs, and then recommend products that address those needs. A salesperson is simply trying to get you to buy what they’re offering.
4. Be sure that everything has been explained in layman’s terms.Most of us don’t speak insurance. So it’s essential that your agent be able to communicate the intricacies of the coverage clearly – and jargon-free. This will also ensure that he or she can communicate effectively with your board, which is going to be extremely important.
5. Ask for a comparison of the coverage vs. premiums.Understanding your options with respect to coverage and associated premiums is important. Also, an understanding of available deductibles is critical. Make sure your agent provides this for you to ensure you’re making the most informed decision.
6. Confirm your agent’s knowledge of the property value verification process.A good insurance agent should be accustomed to coordinating with an appraisal service. Avoid any agent who recommends using market value or developer cost, and ask them to define things like “insurance to value,”“guaranteed replacement cost” and “full replacement cost coverage.”
7. Seek someone who complies – and critiques.When you submit your request for proposal, you’re definitely looking for an agent who returns a bid that answers all of your questions. Even better is the bid that includes some constructive criticism on what you’re looking for. The agent is, after all, the expert, and his or her expertise should be demonstrated.
8. Verify an objective relationship.Hiring an agent who is cozy with board members is just asking for trouble. Keep it objective and purely professional.
9. Take a look at the agent’s reputation.Research your prospective new agent to make sure their reputation is one of prompt and thorough handling of claims. Same goes for the carrier they represent -- have you heard of them? How is the carrier’s reputation?
10. Consider the agent’s relationship with the carrier – and your community.This one’s hard to verify, so you’ll have to follow your gut a little. If the unthinkable occurs and your community experiences a significant loss, you’ll want an agent who has a good relationship with the carrier so solutions can be expedited. Likewise, you’re seeking an agent whose personality gels with your board and community. When the worst happens, and people’s emotions are strained, an agent who is adept at communication can help assuage worries and soothe fears.
11. Find out if your agent can act quickly.In the event of a claim, residents will need certificates of insurance provided to them quickly. Your agent will need to be able to accommodate these last-minute requests with zero hassle.
12. Inquire about partnering with your board.Many great agents will provide communications that you can disseminate to your community. This information includes coverage details and ways residents can get to know the agent personally.
13. Look for backup.Alas, one agent isn’t enough. You’ll want to make sure their staffing is deep enough so that your community is served well, even if the primary agent becomes unavailable.
14. Ask for referrals and verify references.Talk to colleagues you know and trust in order to find good candidates. You should also ask the agent for references and make sure you check them. It’s a good idea to confirm the insurer’s creditworthiness by checking its credit rating with a reputable rating agency such as A.M. Best Company.
15. Request proposals well in advance.Start your process 90 to 120 days before your current coverage expires. In order to avoid delays and confusion, it’s best to consult professional help in outlining a procurement process for the agents to follow. It ensures that they will deliver timely, accurate, and relevant information. It’s also a good idea to invite board members, committee members and your attorney to attend each agent’s presentation (which should be scheduled only after you have reviewed the bid privately).
When you think about it, insurance is all about peace of mind. Remember these steps and you’ll be able to experience that when you’re seeking an agent, too. For more helpful tips, contact FirstService Residential, North America’s leading community association management company.