HOW FINANCIALLY SECURE ARE YOUR INSURANCE PROVIDERS? Trusted Choice® Tips for Consumer Insurance Check
Trusted Choice® independent insurance agents can help consumers analyze the safety and stability of their insurance coverage. Given recent events in the news involving AIG, consumers have many questions regarding the stability of their own insurance providers. There has been no information reported to indicate that the challenges faced by the AIG situation will have a domino effect on the insurance industry and virtually all experts agree that the insurance industry, as a whole, is financially secure.
The financial strength of an insurance company is important, and AIG’s insurance subsidiaries are fundamentally sound. A Trusted Choice® insurance professional can provide guidance and information about the financial strength insurance providers. Consider the following when evaluating the stability and soundness of your insurance coverage:
- Financial Strength: Discuss the financial strength of your insurance company with your independent insurance agent. Insurance companies are rated on this, and your agent can access that information. This rating is an independent opinion of an insurance company’s financial strength and its ability to meet its ongoing policyholder and contract obligations. There are a number of factors that contribute to the determination of a rating, including a review of various business data and review of the company’s balance sheet and operating performance. These ratings are given by several organizations that collect and analyze carrier financial and other information and each organization can provide a detailed explanation about their ratings. It is important to remember that the financial strength of the company is just one factor that agents evaluate when helping consumers select their policies. Coverage, price, and customization to the needs of each individual or business also play a large role in making coverage choices.
- Additional Stability Issues:Don’t be blindsided by your insurer’s financial troubles. There are proactive steps that you can take by asking your agent the right questions to protect yourself. Some suggested questions might include:
- How long has this insurance company been in business?
- Have there been any recent atypical ownership or management changes for this insurer?
- Has the insurer faced any reported problems with state insurance departments or other government agencies?
- Have there been any reported cash flow problems at the insurance company?
- Are you comfortable with what can be learned about the insurer’s choice of investments?
- Has the insurance company recently implemented or announced any significant rate increases or decreases
- State Guaranty Funds: Independent insurance agents and brokers across the country understand that state guaranty funds in all 50 states serve as important protection for policyholders. These state funds are backstops that protect policyholders in the event that an insurer becomes insolvent. That means that if an insurance company, for some reason can no longer pay claims, these funds provide coverage up to certain limits which are determined by each state. The coverage caps vary, but many states cover up to $300,000 or more for claims payments. It is important to understand that not all insurance carriers are covered under these guaranty funds and your Trusted Choice® agent or broker can provide information and assistance in determining what coverage may be available to you.
- Independent Insurance Agents and Brokers: Note that independent agents don’t work for one company – they represent multiple providers – so they can offer choices so you can select the carrier and coverage that meets your needs and can provide guidance in times of carrier difficulty. It is important to stay in touch with your agent and ask the right questions.
- An Insurance “Check-up”: It is essential to conduct a comprehensive annual review of all your insurance policies with your independent insurance agent. You may have coverage that is no longer necessary or you might not realize where you are vulnerable to serious losses. In addition, prices and protections can change. Because there are so many types of insurance available to consumers today, consumers should work with a reputable insurance professional who can help sort through vast array of information and choices, which sometimes can be confusing. For example, advice from a Trusted Choice® insurance agency may save consumers thousands of dollars up front by outlining coverage choices that were not clear to consumers, or it may reduce or eliminate uncovered losses in the event of a disaster.
Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies.
Independent agents and brokers offer all lines of insurance—property, casualty, life, and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com. Trusted Choice® is the consumer marketing identity for independent insurance agencies nationally that offer a choice of insurance companies and policies, superior customer service and advocacy. Trusted Choice® was created by the Independent Insurance Agents & Brokers of America (IIABA) and is supported by national and regional insurance companies. www.TrustedChoice.com
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Last Updated on November 22, 2022