If you knew, for a fact, that your home or business would burn to the ground tomorrow, would you buy the cheapest insurance policy you could find? Or would you want to be sure that you were getting the best possible coverage?
So, what I want to know, is when did cheapest, become the best? When did insurance become a commodity? It has always been something that is price sensitive, however it really all started with a certain Gecko, and grew from there… I’m a bit of a media junkie, and I can’t watch television, listen to the radio, or surf the web for more than 5 minutes without hearing or seeing an ad for what I like to refer to as “the big spenders.” They’re all telling me how much money they save their customers.
In 2007, These Big Spenders: Geico, Progressive, Allstate, and State Farm; collectively spent $1.5 Billion on advertising. Yes, that’s Billion, with a “B.” They spent $1.5 Billion to convince all of us that we should buy our insurance from the lowest bidder. In an era of Wal-Mart, Costco, and other discount and wholesale stores, we have all been brainwashed to believe that if we don’t get the cheapest price on something, that we’ve somehow shorted ourselves. Look at Flo in the progressive commercial – she’s selling insurance in a virtual big box store! I’m not saying that you shouldn’t shop around, but be sure you’re comparing apples to apples when it comes to your coverage. It doesn’t save you money if you’re paying a cheaper price, but sacrificing valuable coverage.
I see it time and time again. A potential client comes to me with their current insurance policy in hand. We review the coverage and undoubtedly find gaps, HUGE gaps in coverage. Just last week I was working on a homeowner’s policy where the client’s house was underinsured by $123,000. When I completed my comprehensive coverage analysis, we also found that she would greatly benefit from earthquake coverage. So when I ran the numbers, my quote turned out to be $142.00 more per year. For $142.00 more per year, she gets $123,000 more in coverage AND earthquake coverage. Here’s the kicker, we ended up increasing her deductible to offset this premium difference, and guess what… our annual premium was within $10.00 of their old policy, with MUCH better coverage.
With that said, I want to go back to my first question. If you knew, for a fact, that your home or business was going to burn down tomorrow, would you buy your policy from the lowest bidder? Or would you consult an insurance expert, to be sure you have the proper protection? My point is, most people have the attitude that ‘It’s never going to happen to me.’ Two years ago, one of my long time client’s home burned to the ground. He had plugged in his laptop to charge before he went to work. The laptop’s battery pack malfunctioned, overheated, and caused a fire. When he returned home, his home was nothing more than ashes and a few pieces of charred lumber. He told me, “I never thought I would actually use this insurance.” He received his check quickly, and without hassle, because over the years, we had recommended coverage increases, and policy changes to be sure he was adequately protected.
That’s exactly what an independent insurance professional does for you. It’s not about selling policies, it’s about building relationships, and providing ongoing protection counseling, not just at the time of sale. There are many of us out there who spend our days (and nights, and weekends) thinking about, reading about, and talking about insurance. Independent insurance professionals aren’t a ‘middle man,’ as some of the ‘big box’ insurance companies would want you to believe. We are educated, licensed, and experienced professionals who, instead of representing the interests of one, single insurance company, we represent the interests of our clients. The companies we represent, rarely advertise. Instead of advertising to the masses, our preferred companies provide us, the independent agents and brokers, with their premier insurance products. This allows us to work with our clients to create a custom insurance package; finding the best coverage, at the best price, for their unique situation. Not everyone fits into a cookie cutter policy.