Ever bought a bag of bad apples from the grocery store?
You open the bag. First you find one apple with a brown crater and a sickly sweet smell about it. You throw it in the trash.
Then you select the apple next to it. After further inspection, you find that it is very soft and squishy on one side. It goes in the trash.
Then you smell the back and realize that the entire bag has that same sickly sweet smell as the first apple. Maybe some of the apples are good. But at this point, the thought of eating anything in that bag makes your stomach turn.
Now you ask the grocery store for a new bag of apples. Would you want them to hand you another bag of bad apples?
You risk the same problem by asking another broker to quote an exact replica of your current program. If you’ve got a bag of rotten apples, you’re asking for them to replace it with another bag of rotten apples.
Usually, there hasn’t been any problems with the current program, or you wouldn’t ask for an exact replica of the current program. So why do people ask for Apples to Apples quotes?
Usually, it’s for a couple reasons:
1. You don’t know how to tell the difference between products
2. You don’t know how to tell the difference between agents
3. You don’t trust what people are telling you
4. You don’t know how to be sure they are getting the best deal.
When we break it down into these four categories, it’s much simpler to breakdown he process of buying insurance.
1. You don’t know how to tell the difference between products
Every product is different. That said, certain products are homogenous enough that you don’t need to be terribly concerned the difference between companies.
Personal auto insurance is homogenous. Business Owner policies are similar between companies. Homeowners policies are similar, as long as you can validate that key coverage limits are identical.
General Liability insurance for a contractor is not. Professional liability insurance is not. Nor is Workers Compensation insurance. On these coverage lines, details can make a big difference.
Use the wrong classification for Workers Compensation, and it will increase your cost. Same thing for General Liability.
Misrepresent your operations for Professional liability and you may not have any coverage at all.
2. You don’t know how to tell the difference between agents
If you have determined that you need professional advice on the products you’re buying, this may be the most important decision you make. A good agent will know where to find the products you need, how to get them, and will make your life easier. The wrong agent will make you do all the work, tell you how hard it is find what you need, and make the process seem very complicated.
That said, it’s intimidating to select a professional, whether it’s a doctor, a lawyer, accountant, or insurance agent.
Here are some questions you can ask an agent to validate whether they’re the right person for you:
1. What is your level of experience?
2. How many organizations like mine do you serve?
3. What is your process for approaching the marketplace?
4. In your experience, who are the best carriers for a business like mine?
5. What is your process for evaluating my needs?
6. What will your renewal process look like for my account?
Listen for a person who has a plan of attack. If they sound like they know how to take care of you from beginning to end, they’ll take good care of you.
3. You don’t trust what people are telling you
This is a totally valid feeling. It’s especially overwhelming to buy a product when you don’t understand what you’re buying, and therefore don’t know if you’re being fed a bunch of lies.
The best thing you can do is educate yourself on a basic level. Ask what coverages you should be buying, then research those coverage items.
Research different brokers in the area. Ask how they will take care of your account now and in the future.
You don’t need to know everything. You just need to know enough to tell when someone is trying to be dishonest with you, or they don’t know enough be totally transparent with you.
4. You don’t know how to be sure they are getting the best deal.
The truth is that there is no way to guarantee you’re getting the absolute best deal at all times. No company is the best company in all situations. No broker has access to all the different companies in the world. There is always a chance you will be leaving some dollars on the table.
The question is, if you’re getting a product that fits your budget, and you have a broker that provides a good level of care, and they are transparent with you, does it really matter?
Here is a healthier way to address this concern – does my broker have enough expertise and access to enough of the key insurance companies that serve my marketplace in order to give me an accurate representation of what is available to my business?
If your broker represents 8 out of the 10 key companies and has talked to those companies in the last 3-5 years, are you really missing out on anything?
Like I said at the beginning of the blog post…
Quoting apples to apples will only get you a bag of bad apples. Break down what you’re buying a little deeper, and you’ll see there is a better way to buy insurance.
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