There are a lot of independent insurance agents in mid-Michigan! Developed in the 1800s, the independent agency business model gained traction as a way to give consumers more choices and to create a competitive sales force not tied to a single insurance company. Independent agents are not employees of the insurance companies they work with, rather they handle the marketing and sales functions for the insurance companies they represent.
Independent agents help you identify how much coverage you need, provide quotes from different insurance companies and recommend the insurance company that’s the best fit for you. Then your agent sends all this information to the chosen insurance company for processing. Your agent remains in place to service your policies (take changes, report claims, discuss coverage, price various options, etc.) and find you a different insurance company when it’s time to do that.
The main point is that your actual insurance contract is with the insurance company. This means correspondence (letters, emails) from your insurance company needs to be opened promptly and taken seriously. If you are late with your payment, by law the insurance company must notify you with a warning letter. If you wind up cancelling for not paying your bill, the insurance company will also send you a cancellation letter.
If you anticipate you may be late with your payment or get into trouble financially, contact your agent ahead of time and tell them you need to talk. A change in payment plan might buy you some time, or perhaps you can do without some of the coverage on one or more of your policies and lower your insurance costs.
In today’s insurance marketplace, insurance companies are more selective about reinstating a policy that’s cancelled for non-payment (making your old policy active again.) If they can’t reinstate and offer to write you a new policy, they might need to use higher rates. This is why it is important to get in touch with your agent before your policy cancels!
If the insurance company sends you a letter, something important is going on. Open ALL mail from your insurance company and take it seriously. Then contact your insurance agent as soon as possible for guidance on what to do about it!
