Texans are constantly bombarded with advertising for insurance. If you can think of insuring it, someone is running an ad for it. Many of these ads are claiming all kinds of savings on your insurance premiums. And we support saving money. But the harsh criticism that can be made for many of the policies that get written is that they do a poor job of protecting your family's interest in the event of a claim. The question ultimately comes down to whose best interest is being put first in any transaction, you or the person selling the policy. The word fiduciary has very special implications in the financial field and is highly important to the consumer. Let's look at why you should always evaluate whether or not the person offering you a policy is acting as a fiduciary.
What Is The Definition Of A Fiduciary?
In the world of financial services, of which insurance can fall, the phrase fiduciary duty is often used to describe the level of service that an adviser provides to a client. Fiduciary duty is best defined as a legal term where one party of a relationship is obligated to act solely in the best interest of the other. That means that the adviser, or sales person, is solely putting your best interest forward in any transaction rather than worrying what's in it for them. Sometimes, that means not doing anything at all from our perspective. Let me explain.
When we begin to evaluate your insurance needs, whether that be home insurance, commercial insurance, life insurance, or health insurance; we focus on what is best for you. We are always looking at how to properly protect your interests while also measuring that against the prices available in the marketplace. That is how every insurance agent should work, but some don't have that ability.
Why Isn't Everyone A Fiduciary?
Ultimately, some insurance agents just don't care. That is not a popular opinion, and one we are not supposed to say out loud. These are usually just sales people that are focused on a commission from the sale and are moving on quickly to the next person in line. If someone is pushing you to move faster without a really great explanation, it might be a good indication that they are more concerned about what's in it for them rather than what's in it for you.
Beyond that, there are some limitations that come into play for certain agents. Some agents represent only one company and one product. It is difficult to present an objective evaluation of your needs and situation when you only have one solution to the problem. As an independent insurance agent, we work with many different potential solutions and can easily compare what is right for you in your needs today so that you can make an educated decision. Along with that, some times we recognize that your current situation is best for you and will recommend staying put rather than making a change to Insurance For Texans. That allows us to sleep at night while also providing rock solid advice to Texans.
How Do I Know If My Agent Is Acting As A Fiduciary?
There are some important and simple items that you can evaluate to determine if the agent you are considering is putting your best interests first.
- Have they performed a thorough needs analysis?
- Are they expecting me to move much faster than I expected or wanted?
- Do they have access to multiple solutions for my needs?
- Are they proposing radical changes to obfuscate a price issue?
- Can they provide a detailed explanation to your questions or concerns?
It sounds simple, but the unfortunate reality is that many people simply see the potential of a big paycheck in insurance. As a result, they are often time pushing things you might not need even though they sound good. We take this responsibility very seriously at Insurance For Texans. Your trust is what allows us to continue on helping Texans.
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