How To Get Help Finding The Best Insurance Options in Texas?
Key Points
- You can get help finding the best insurance in Texas by working with state-licensed insurance professionals who do the research for you. An insurance agent analyzes your needs and suggests the best and most cost-effective options to fulfill them.
- Frequently, in order to find the best coverage, it is necessary to contact multiple agents, who represent different insurers and therefore offer slightly different portfolios of products. For what it is worth, using an insurance agent for assistance in obtaining insurance coverage in Texas does not cost the insured extra. Speaking with an agent is very important for the insured to understand how the desired coverage functions, prior to committing to the full term policy.
- Buying an insurance policy in Texas starts by finding out the available options and the associated costs. Then the choice is made based on the most optimal coverage that works best with the set budget.
- If you are shopping for insurance by yourself, you should study all the available information about your chosen type of insurance until you understand how it works. After all, you need to understand how the selected insurance covers your stuff as well as how it reacts when it must pay out claims.
- Then you research the best available products available on the Texas insurance market, and contact the chosen insurance companies to get quotes and to bind coverage. Most insurers have staff (captive) insurance agents, whom you can contact for help with the insurance products offered by that insurer only.
- If you want information and quotes from multiple insurers, you should contact an independent insurance agent who represents a variety of insurers.
Your best option is always to get professional advice. Texas insurance professionals are trained in insurance matters and licensed to practice in the state. The certification qualifies an agent to market, sell, make recommendations based on the client’s needs, and complete policy transactions on behalf of an insurance company.
Overview: Insurance Agents - explained
Per Texas Insurance Code, insurance agents are licensed according to specialties. There are different types of insurance in Texas (homeowners, renters, auto, life, health, annuities, commercial, personal lines, etc.), and in order for the agent to be effective and organized, Texas insurance agents usually work according to a focused specialization.
Once licensed, the agent seeks to get a contract with an insurer by appointment. Some specialize in more than one area, but it remains true that they must qualify to practice based on certification. To get an insurance agent in TX, you may reach out to them by phone, online, or in person. Some insurance agents represent multiple insurers, while others may work exclusively for one insurance company. Regardless of the type of practice, Texas law insists that all insurance professionals must be true and unbiased in their dealings with customers. In both categories, the agent represents the insurer in the advertisement, accurately completing all applications for insurance for underwriting, and delivering the policy to the applicant.
Texas Department of Insurance (TDI) is the state agency that regulates the practice in the industry not only by licensing, but also by monitoring the activities in the industry. In insurance industry terms, the agent is the “producer” relative to the “principal” (insurer). An agent could be independent or exclusive (also known as Captive).
Independent insurance agents may market insurance policies for different principals simultaneously, while exclusive agents have sole commitments to a specified principal or a group of insurers.
The difference between the two categories of agents is that independent agents usually have a wider range of products to showcase and can also provide prospective parties the necessary knowledge about each product to assist them in making a decision based on their interests.
On the other hand, the exclusive (captive) agent serves more like a customer service representative for an insurance company. They know the company's products in detail, and provide expert service in servicing those policies and products only. If you need assistance in the course of the policy term, the staff agents are always there to answer your questions. But do not expect a captive agent to refer you to another insurer’s product, as an independent agent usually would.
So, why should you use the services of an insurance agent instead of shopping on your own?
Who Is An Insurance Agent in Texas?
Texas insurance agent acts on behalf of an insurance company that is registered and licensed to operate in Texas. An agent represents the products and acquires customers for the insurance companies by assisting with the selection and purchase process.
Are Insurance Agents Necessary?
Yes, insurance agents are necessary because they serve a vital, primarily educational function in the society. Agent’s main role is to be a professional resource of insurance information and options of coverage, to best suit the client’s needs. An agent is an analyst who matches the individual or a business to the best insurance product currently available on the market - to which they have access. This requires an agent to have in-depth knowledge of the current local market, and how all the available products can be combined, to result in the best and most cost-effective coverage for the insured.
As a bonus, after assisting with the purchase of the policy, the agent usually continues to represent the client with the insurer throughout the life of a policy, so if you have a claim or just a question - your agent is there to help, free of charge to the insured.
An insurance agent assesses the needs of the client and matches them with the most comprehensive and cost-effective solutions currently available on the local market that the agent has access to.
What Are The Advantages to Using an Agent to Purchase Insurance?
The agent is the “face” of the insurer on the Texas insurance market. Being professionals, the agents are licensed to effectively represent an insurance company in terms of product knowledge and the internal company processes. They are also responsible to the client for handling the bulk of paperwork involved in buying and maintaining a policy.
Despite being a representative of the insurer/principal, the insurance agent must always provide balanced information. A Texas insurance agent recommends the plan of best fit based on a prospective buyer’s needs from an array of available options. Agents with more experience are usually more likely to be adept in this than newer agents. It is not hard to see why, as newer agents may not fully grasp the range of products available and the necessary technology to handle the transactions with maximum efficiency. The hallmark of a good insurance agent is a balance of knowledge and technical know-how.
Similarly, an insurance agent continues helping with matters arising in an active policy on behalf of the policy owner. For example, you may need to file a claim or clear out billing problems. Your insurance agent is there to help you with the administrative process involved on your part. In Texas, insurance ethics code requires the agent to place customers’ interest ahead of the insurer, although they represent the insurer.
Do You Need an Insurance Agent to Get Insurance in Texas?
Not necessarily, but most likely.
While some types of insurance, where the selection process is rather straightforward (like the Affordable Care Act (ACA) health insurance or Pet insurance), may allow the insured to search and select coverage on their own, most insurance sold in Texas requires the use of insurance professionals as the middlemen. This is because the insurer is not willing to take a chance on the consumer making an uneducated choice. Imagine purchasing a multi-million dollar coverage for your business on your own, through an agent-less process, to later discover an overlooked important exception in the policy. Whose fault would that be?
Whenever you seek insurance advice, speak to a state-licensed professional, who evaluates your needs and suggests the most optimal solutions for your specific situation.
When you contact an insurer directly (online, on the phone, or in person), you speak to the insurer’s “captive” agent, who guides you through the currently offered company products and finalizes the sale, if needed. The captive agents cannot help you with the products from other insurers, even if they are aware of a better product offered elsewhere.
When you want more options to choose from, contacting an independent Texas agent can net you the most amount of choices. Independent agents provide the solutions to your needs based on what they have in their portfolio. Best independent agents constantly monitor the local market for the best products and sign up to represent those insurers for their clients.
When selecting a Texas insurance agent to work with, ask them for a list of the insurance carriers that they represent. The longer the list, usually, the better.
Is It Cheaper To Get Insurance Through an Insurance Agent in Texas?
It makes no difference whether you get insurance through an agent, a broker or the insurance company directly. The price you pay for insurance is usually the same. However, by using a well-connected insurance agent you are able to tap into a broader selection of options, where you may be able to save money by combining policies to achieve your desired coverage for lower cost (discounts).
How Do Insurance Agents Buy Their Own Insurance?
The agent’s goal (professionally and personally) is the same as everyone else’s - to get the best and most cost-effective coverage. Professional insurance covers the business, while personal insurance covers the agent’s needs as an individual.
Finding the best insurance products requires knowledge of the market in that particular niche of insurance. In most cases, insurance agents use the services of other agents, who may have broader access to options. In case if the agent is licensed in the needed product and feels like they have the best product on the market, the agent may sell insurance to themself.
Can An Insurance Agent Sell Himself Insurance and Collect Commission?
Yes, an insurance agent can purchase insurance through themselves as an intermediary, as long as they are licensed in the product and have an appointment with the desired insurer. The agent in this case is both the agent, who receives the commission for the sale, and the insured, who is paying the monthly premiums at the same price as anyone else with their level of risk would.
Do Insurance Agents Need Insurance?
Yes, Texas insurance agents need insurance, both professionally and as any individual - personally. Personally, agents, like everyone in the ideal world, should have health insurance and personal property insurance to cover their belongings.
The most important professional insurance for an insurance agent is Errors and Omission (E&O) Liability insurance. E&O coverage protects the insurance agent from liability claims stemming from the mistakes they might have made, while helping a client. Negligent actions that may occur include interviews, phone conversations, response to inquiries, delivery of policy documents, and more. In the long run, it is to the client's benefit that the agency has this insurance in place. The E&O policy coverage does not extend to intentional acts of error or deceptive trade practices.
The second most important professional insurance for an insurance agent is Cyber Liability. Cyber coverage is important because insurance agents work with technology and personal data. In case of damage or breach to the system, cyber insurance helps cover the recovery process and possible resulting liability claims.
Additional professional coverage an insurance agent can benefit from, depending on how they conduct operations, includes:
- General Liability
- Business Property
- Workers’ Compensation, and many more.
Is Buying Insurance Online Better Than From an Agent?
Not necessarily. Initiating and completing transactions online is a reality in today’s insurance marketplace and Texas insurers constantly come up with more new digital ways to attract new clients. While automatization speeds up the process, a live interaction is still usually required, at least to go over the disclaimers of the policy and give the new client an opportunity to ask questions. Most insurance companies engage automated processes during the quoting stages, then switch to in-person contact with the help of a live agent to finalize the purchase.
Generally, Texas policies with guaranteed acceptance and/or smaller coverage may be easily purchased online, if you know how to compare the quotes and coverage side by side. You may initiate quotes for bigger policies with more elaborate coverage online too, but expect a transition to one-on-one interaction at some point during the process.
Before you decide in favor of either option, be sure to answer these questions:
- Are there products offered by the agent absent in the array of products displayed online?
- If the answer to the previous question is yes, are there price differences? (transactions that do not have an intermediary may be cheaper)
- Is the insurance agent a Captive or an Independent? Answering this question determines if you will have access to insurance products from multiple sources or a single insurer or an agency. Independent agents are likely to have more variety than captive agents.
- Did you find policy plans that meet your insurance needs? If not, are you aware of the alternatives?
- Have you read the firsthand testimonials from policy owners of the insurer you decided to use? It is important to consider this, especially if you are taking the online option seriously.
- Are you comfortable working with an online agency?
In essence, take time to shop around and run as many quotes as possible. If there are any questions - seek professional advice. When speaking with an agent, tell them exactly what you want to accomplish by getting the coverage and see what they come up with. You can always go back to your best online quote or try another agent.
Must-Know Information About Insurance Agents in Texas
Are All Insurance Agents The Same in Texas?
No. All insurance agents are not the same. The first distinction among insurance agents is according to the type of Texas insurance license, with further division according to what kind of insurer they may represent.
What Are The Types of Insurance Agents in Texas?
Texas insurance agent may be licensed in one or more of the following general categories:
- Property and casualty (P&C) insurance,
- Life, Accident, and Health insurance
P&C agents are authorized to insure personal and commercial property and liability policies. Agents licensed only in life insurance can offer only life insurance that does not require additional licensing (such as Variable Universal Life (VUL) - which requires a securities license). Health-licensed agents may offer their clients various types of health insurance coverage.
Some Texas agents choose to concentrate on one topic and grow their customer base in that niche, while others may be able to offer options across multiple insurance disciplines.
Further, Texas insurance agents are classified as:
- Independent, or
- Captive.
Independent insurance agents operate by signing independent agreements with insurance companies of choice. As the name implies, they operate independently of any mother agency. While independent insurance agents may enjoy the benefit of access to more products, they may not have access to the best insurers unless they have a proven track record of success. Also, the overhead expenses involved in running an independent agency may be prohibitive to agents looking to start up one.
On the other hand, captive insurance agents work only for a single insurer or group of agencies, representing the portfolio of options given to them. While they may enjoy the financial protection of being employed by an agency, they are allowed to operate only in the parent company’s interests. As such, their services tend to be biased.
Some insurers are not available on the independent insurance market, because they choose to operate using employee (captive) agents only. If you want their coverage, you must contact the in-house agents.
How Do Agents Help The Client During The Search For Insurance?
Insurance agents help clients during the search for insurance by:
- Carefully listening to the client’s insurance and financial needs.
- Analyzing the current insurance market, to see which insurers offer products that match the client's needs most closely. If the agent does not have access to the products meeting the client’s needs, the agent may refer the client to another insurance agent, who does.
- Compiling a comparative quote, where the client can easily assess and compare the offered solutions.
- Assisting the client with filling out all paperwork and applications, needed to obtain coverage.
- Educating the client about how the chosen coverage functions and what to expect in case a loss claim must be filed. (The agent usually continues to act as the client's representative with the insurer throughout the life of the policy).
What Does an Insurance Agent Do On a Daily Basis?
A Texas insurance agent duties and daily routine may look like this:
- Monitoring existing clients’ policies
- Assisting existing clients in settling claims and other issues
- Analyzing current policies and determining additions or modifications in line with government policy changes that impact insurance
- Advertising and soliciting new clients by generating leads. Leads may be mail solicitations, paying visits to newly established companies to make presentations, creating awareness on the importance of insurance purchase etc.
- Assessing the potential buyers’ needs and explaining relevant information about coverages and premium ratings.
- Updating clients on useful information about prospective or active policies
- Taking care of policy renewals
- Pitching new clients on coverage types available in insurance products
The roles may be more varied with an independent insurance agent.
What Is The Licensing Process for Insurance Agents in Texas?
To become licensed, an agent must have met the following criteria:
- Passed the certification examinations set up by Texas Department of Insurance (TDI)
- Passed a 2-hour ethics course prior to licensing and every two years as part of the relicensing process.
- Be registered and assigned a license number to practice in Texas
- Have a National Producer Number
Licensing exams are very similar among all U.S. states, but with a few tailored aspects as is relevant to each state’s insurance code.
How Can I Verify That The Insurance Agent is Real in Texas?
Getting a licensed insurance agent to assist with purchasing a policy is as important as the insurance product itself. Before you decide to work with an agent, do a background check of their status with the state’s licensing board, that is, the Texas Department of Insurance (TDI). TDI provides access to a portal, where the license status and the list of authorized insurers of each agent may be verified.
It is illegal to sell insurance or make professional recommendations without an active license of the appropriate type.
How To Check What Type of Insurance An Agent Can Sell?
You can look up the type of insurance an agent can sell in Texas by searching for their license with the state’s licensing authority. In order to do the search, you do not need to know the agent’s license number. You only need the agent’s first name, last name, and the city where they operate from. The resulting list provides:
- The agent’s license number
- Types of insurance the agent may sell
- The length of time the agent has held the license, and more.
How To Check What Insurance Companies Can The Agent Represent?
You can check what insurance companies the insurance agent may be able to offer you in Texas, based on the companies the agent is appointed to represent.
After obtaining the agent's Texas license number (as described above, or provided by the agent), you can run the report to see the list of appointments the agent has with various insurers.
How Do Insurance Agents Get Paid In Texas?
The primary source of payment for an insurance agent’s services is the percentage commission paid by the insurer. Such payments are not coming from the insured's pocket, but instead from the insurer's specially allocated marketing fund.
Do I Have To Pay Insurance Agents?
No. In most cases you do not have to pay any service fees to the insurance agent.
In very rare cases the agent may charge a fee for the service upon agreement. Even so, you have the option of getting your information from other authentic and free-to-you sources. You can get your directions at the state agencies or state-approved organizations on insurance.
For emphasis: You do not have to pay a fee for the Texas insurance agent’s services.
How Much Does Having An Insurance Agent Affect Your Premium?
The involvement of an insurance agent does not affect your premium cost in any way.
You get to benefit from professional service and advice at no extra cost from your pocket. Using an insurance agent is some form of insurance in itself because you get to shift the liabilities of guesswork and complications of the process to a professional. This way, you do not have to fully rely on yourself, to understand insurance contracts or navigate the administrative process. The insurance agent sustains a seamless flow of coverage through professional knowledge and experience throughout the validity period of the policy.
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