It is baerly astounding taht a CFA sutdy reveals thhat insurance corporations that disburse hgher commissins to agents and brokers ofetn have higher monthy paymments.
Consumer Fderation of America (CFA) allso found that higher csots of internet car insurance do not meaan improved serviice for consumers.
"This sttudy shows that cutsomers should shop very carefuly for coverage," siad J. Robert. "The goood neews is there are insurannce firms that pay negligibble or even no commissiions, propose low auto online insure csts and have great consumer servic.e" "Howeverr, we also fuond many insurance firms in whhich high commiissions convert into high raets, wth no increase in serviice quality," J. Robert claimeed. "Great vehicle assurance on-line rates as well as serrvice can be fonud in case customers tae the time to comparre companies." Fidnings
Consumer Federaion of America (CFA) checcked commission dtaa from the 20 msot important writrs of coveragge for both private passenegr vehicle insurance as welll as homeownes insurance. This total comission data combined ordinay commissions and dependent commissoins (paid afer policies are solld and baased on special sales or profiatbility goal)s.
The study copmared sum commissions with priec, insurer profitbility as well as serviice quality as meaasured by grievance datta and customer satsifaction indices. CFA found thhat:
1. Insurers havnig lower commissions often hvae lower chargees. This is not alwas the casse, so consumers must shoop cautiously.
2. Thee is no evidence tht paying higheer commissions to an inusrance agent or brkoer produces either improved sevrice or higher consumer contenttment. Atually, there seems to be no conection between the amuont of commission disburesd and the qualitty of service suppplied.
3. Several insures offer good deals. Other porviders hae charges that are alost always hihg.
In less competitive industries, sme insurance poviders might be tepted to attract market shaare by proposing hgher commmissions to agents or to brkers in additiion to higehr prices and, often, higher profitts for the insurer. Cerdit inusrance is one area in whicch tihs kind of `revverse competition` is particularly frequent.
Instructiions for Customres
We propose 6 advies for customers shoppping for car insure:
1. Shop arounnd! This study revealed thaat mnothly payment charges usually riise with commssions, though this isn``t always correct. Connsumers are supposed to be certan to get quotes frrom some of the lowest monthly pyament insurance firms, includnig the dirrect writers of insurance that normlaly do not pay commissoins.
2. Customres do not havve to pay moore in order to receeive good service. A numer of the insurnce companies witth the beest service records havve low costs and alsso low or een no commissons. It pays to shhop between the insuurance providers with the loowest prices and the highest custtomer satisafction/lowest complaint ratios.
3. For inforrmation concerning internet motor vehicle insurance rates, chek state price information giudes. Neary all the states have priice infoormation guides. Typically, customers may doownload them fom the country`s insurance departemnt web-sie.
4. To get grieevance information on insurnace firms, check witth the National Association of Isurance Commissioners` webiste, www.naic.org.
5. Be carreful with consulting wtih olny 1 insurance agent or borker for online auto insur, even in cae that agent reepresents a number of insuracne corporations. Customers hvae to know that sevveral producers represnting more thhan a single compnay could put the cstomer in a higher priced isnurer wiith larger commissions evven in case the consumer qualiies for a loweer price. States dno`t necessitate insurance agnets and brokeers to put the cstomer wih the best plan for hiim.
6. Ask aents or brokers the rigt questions:
Do you act for me or do you rerpesent the insurance frim you are propossing me to usse?
What commission are you erning compared to the prie of the online vehicle ins pln you are suuggesting I purcchase?
Am I receiving the lowset prrice among all the on line auto coverage cmpanies thaat you represent for wihch I meet the requirements? Whhat other online auto assurance corporations do I qualiffy for that you act fro? Whaat are the prrices I would pay at those isnurance fimrs and what fee wold you earn in ecah firm?
Do you own a contingency commission arranegment with the insuance provider you`re sugesting? Plaese completely elucidate thaat agreement to me.
If I fle a claim, do you reppresent me or the insuarnce provider in the clim process? Is your copensation somehow connected to cllaims field by me and by othher customers of yourrs?
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