Better Claim Service: Independent Agent vs. Bank

Independent Agent vs. Bank: Better Claim Service. Choosing between an independent insurance agent and a bank for your insurance claims can significantly impact your experience. While many assume banks offer better service, real-life incidents reveal otherwise. Here are three true stories that highlight how banks can fall short compared to independent agents.

Malicious Damage Incident

My friend, who owns a plastic product manufacturing factory, experienced vandalism when restless locals damaged his semi-transparent plastic ceilings. I advised him to contact the bank, as his factory was mortgaged for a loan facility. The bank’s response was shocking. They told him, “Sorry, sir, you can only claim for fire damage, not roof damage due to vandalism.” Despite the fire insurance policy covering strikes, riots, and malicious damage, the bank refused the claim. My friend was furious and switched his factory fire insurance to me, and he’s stayed with me since.

Lightning Damage to Television

One day, my elder sister called me in distress. A lightning strike had caused a power surge, damaging her home and cracking the wall. The repair costs were substantial. When I reported the incident to the bank, the response was, “Sir, you need to obtain a meteorology report and have your sister’s daughters,  co-owners, come to Kuala Lumpur to file the claim.” With one daughter in Hong Kong and the other in Kajang, the travel expenses and hassle were too much. We had to forgo the claim. At that time, I was new to handling insurance claims, having only passed the PCE exam.

Sewing Machine Damage

In Batu Pahat, a hub of textile factories, one of my clients faced frequent lightning damage to her sewing machines. Despite three claims over ten years, totalling less than RM20,000, the bank repeatedly denied her claims, stating, “No claim unless fire damages your machinery.” Frustrated, she turned to me for her insurance needs. For the past decade, I’ve handled her factory insurance with only two minor claims. Her sewing machines, insured on a new-for-old basis, were always promptly repaired or replaced.

Better Claim Service: Independent Agent vs. Bank

Banker or Insurance Agent/Broker

These stories illustrate that banks often fall short in providing the personalized and dedicated service that independent agents and brokers offer. Banks might be convenient, but their limited options and less specialized knowledge can hinder the claims process. In contrast, independent agents advocate for you, ensuring your claims are handled efficiently and fairly.

Insurance agents and banks can act as agents

Insurance Agents:

Independent Agents: Work with multiple insurance companies and offer a variety of policies from different insurers. They focus on finding the best fit for their client’s needs.
Captive Agents: Represent a single insurance company and sell policies exclusively from that insurer.

Banks as Agents:

Limited Options: Banks often partner with specific insurance companies and offer limited insurance products. Their focus is primarily on banking services, with insurance as an additional offering.
Convenience: Banks provide the convenience of managing financial and insurance needs in one place but may lack the specialized knowledge and variety offered by independent agents.

In essence, while both can act as agents, independent insurance agents offer more tailored and specialized services compared to banks.

What is the difference between agent and broker roles in the insurance industry?

The main difference between an insurance agent and an insurance broker lies in whom they represent and the range of options they can offer:

Insurance Agent: He or she represents one or more insurance companies and sells policies from those companies. They may be captive agents (working for a single insurer) or independent agents (working with multiple insurers). Their goal is to sell policies from the companies they represent.

Insurance Broker: He or she represents the consumer and helps them find the best insurance policy from multiple providers. Brokers can access a wider range of insurance options and compare policies to find the best fit for the client’s needs.

In summary, agents are tied to specific insurers. The brokers work independently to find the best coverage for their clients.

Next time you’re choosing an insurance provider, consider these experiences. Independent agents and brokers may provide better service, especially during the critical moments of filing and processing claims. Their expertise and dedication can make a significant difference, ensuring you get the support and compensation you deserve.

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