The Dangers of Working with an Inexperienced Broker

The greatest joy in this job is working with my many wonderful clients.
I try to look after their interests the same way I would a member of my own family who is shopping for insurance coverage.

That is why it pains me when I’ve put the time and energy into researching and selecting the coverage that would best suit my client, only to have them swayed off course by an agent they met through a seminar or a friend. (Oftentimes both.)

One of my prospective clients recently enrolled in the most expensive option on the market, and for no additional benefit. The plan was identical to the one I chose for him that cost far less. (He, of course, went to a seminar…with a friend.)

In another example, the spouse of one of my clients decided to enroll in the same plan as his friend with another agent. Little did he know that it would cost him not only $300 more per year now, but it will likely balloon to $500+ more per year in the near future due to rate increases.

Another enrolled in a Prescription Drug Plan that did not cover his drugs at a price he could afford. He would have saved money and been far happier simply accepting the advice that came from my research.

Practical experience has proven that people often don’t end up in the best insurance coverage for their needs and budget, and this is such a shame because it is both needless and preventable.

As a professional in the insurance industry, I like to think that all of my colleagues are true professionals as well and have the best interests of their clients at heart.

Of course, we’ve all heard of countless exceptions. And to be honest, one of the main forces driving human behavior is greed. It is rampant everywhere and in every industry, even (sadly) my own.

That is an ugly truth that we have to comes to terms with.

When an insurance agent fails to select and encourage their client to enroll in the best product for their individual needs and budget, we will, at least for the sake of this article, assume that the mistake was made from no ill motive, but from misinformation and lack of experience.

You see, many agents have a primary focus to their business, but still have other ancillary products in their portfolio in case a client should ask about that type of coverage. Oftentimes the agent may merely “dabble” in these extra products and not have a comprehensive understanding of how complex that aspect of the insurance industry is.

For example, many agents specialize in Property and Casualty insurance. They are the ones to go to when you need Auto or Home insurance. They spend all day, every day, handling these products. They have a working knowledge of all the in’s and out’s.

But when a client asks about Health insurance. Or Medicare. Or Dental insurance. Or Life insurance.... the P&C agent will remember, “Oh yes, I do have that one health insurance company that I got contracted with in order to have a health insurance product to offer my clients.” Or they might even have a handful of products.

But when it comes to your health insurance needs, or Medicare, you really need to be working with a true professional who has an extensive specialization, knowledge, and experience in this field.

Making a mistake on your health or Medicare insurance can end up costing you in more ways than one.

* You may be enrolled in a network that doesn’t allow you access to the providers you need or want;
* You may get prescription drug coverage that doesn’t fully cover your drug needs;
* You may end up enrolling in products that have unexpected (to you) rate increases on a regular basis;
* You may pay $1,000 more per year than necessary.

This is a common scenario played out in clients I work with.

The problem is when agents who don’t work with health products often, but sell them "here and there", they usually only take the steps to be able to sell one or two plans. (Why? Because these steps can cost money, take a lot of time and energy, and require annual recertifications.)

That means clients will end up in one of the plans that are on the agent’s very short list of plans they will receive commission on instead of ending up in the plan that is truly best for the individual.

Additionally, these agents just don’t have the insight and knowledge that people do who work with this area day in and day out possess. Their intentions may not be bad, but it’s not as simple as they like to think it is. The “simplified approach” ends up costing people money.

We will go into how to analyze some of the metrics that contribute to future costs in our next blog post. And you will see just what a difference the insight of an experienced agent can make in your overall satisfaction with your insurance coverage.