5 things your insurance agent isn’t telling you

How to get the most from your insurance company.



From the April 2013 issue of the magazine.


1. Watch your language. Using the wrong words can reduce your chances of a successful claim. For instance, if you find a metre of water in your basement and call to complain about the flood damage, your file will be closed on the spot. That’s because floods are seldom, if ever, covered under home policies. But complain about a sewer back-up and you may be successful. Other verbiage to avoid includes exaggerations, such as “I’m an awesome driver,” or imperative statements, such as “send me the money.” These, and other statements like it, alert insurance companies to a potential fraud.

2. I get a free trip if I sell you this policy. Insurance brokers earn their money from commissions they receive after selling you a policy. They also get incentives. Some insurance companies offer luxurious, all-inclusive trips to exotic locations to keep agent business. Other companies give Canadian Tire money as a bonus. If your agent is pushing you towards one policy, ask what incentive he may be getting.

3. I’m deep in debt. According to Greengrass Group, a research firm, 10% of agents have substantial debt. A good portion of this debt is from accumulated chargebacks—premiums paid back to insurance providers when policies are cancelled before the end of term. Get enough chargebacks and an agent may be tempted to find bigger premiums to earn bigger commissions.

4. I want you to switch policies. Agents earn 30% to 90% of your annual premium when they first sell you a policy. Each year you renew, however, the agent will only receive a 3% to 10% commission on your annual premium payment. If your agent pressures you to switch policies, he may be trying to earn another fat, first-year commission cheque.

5. You need to check my background. While the vast majority of insurance agents operate well within the confines of the law, a few bad apples can certainly spoil the bunch. To protect yourself, call your provincial insurance regulator to ask if your agent has been charged with any compliance breaches, such as fraud.

5 comments on “5 things your insurance agent isn’t telling you

  1. I work in insurance in British Columbia, although the rules of insurance differ from province to province, this article is extremely far-fetched. I hope people don't read this and take it seriously. We absolutely DO NOT get more commission on new business than we do renewals. These tips made me laugh at how ridiculous they are. If you find the right broker, their main concern will be your needs and the best coverage for you. And trust me, there are more good agents than there are bad.


    • @Meaghan. I think this article referred to the broker, not the brokerage firm. I use to be a commissioned broke for 20 years in Alberta and I received a higher commission on new business than on renewals. The brokerage firm itself didn't get any more commission from the insurance company. As far as bonuses go, it is usually given to upper management and very rarely trickle down to the workers who actually do the work. Would I compromise my integrity as a broker to sell more business, never.


  2. Whoever wrote this article is guilty of lack of proper research as many things are hallucinations and not based on fact!


  3. You only find how good they are when u need to use them. I have had a policy for 30 years and now manulife is raising my rates 162%. I am 77 how fair is that?


  4. Terrible article. There is a big difference between Life insurance agents and Property & Casualty Insurance Brokers.


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