Do you hire multiple agents for every renewal and shop for the lowest price? Do you spend countless hours each year reviewing the same business information with several agents? If you answered yes, you may be making simple insurance marketing mistakes.
“Business owners need to have a strategic plan for marketing insurance, part of the plan is a defined marketing and renewal process,” says Ryan Clugston, a client advisor at SeibertKeck.
Smart Business spoke with Clugston about common misperceptions regarding the insurance renewal process and how to make better use of your time and resources.
Why not purchase the policy with the lowest price?
Saving money may seem great, but it also could mean gaps in coverage. Every carrier’s policy differs in language and coverage offerings. The variables in the policy language and how the coverage is structured will greatly influence the cost of the policy. Sometimes the least costly policy has the right coverage, but not always.
Many times the least expensive policy has more constrictive language, including warranties that the insured must adhere to for coverage to respond in the event of a claim, such as having certificates of insurance for all subcontractors or that claims notifications have to be made within a specific time period for coverage to be provided. There are a number of other examples where a policy may restrict coverage. These can be removed or adjusted, for a charge, which would vastly improve the claims experience.
Always review the policy to make sure it is complete before switching based on price.
Should you shop insurance companies every year?
In the long run, businesses that shop their insurance every year looking to beat down their cost of insurance are doing themselves a disservice. When an underwriter sees the same submission to quote a business, year after year, from multiple agents, the underwriter will become less interested in quoting it. They assume that if they do write the insurance, they have a great opportunity to lose it the following year because it will be marketed again. It is beneficial to build a relationship with your agent and carrier; this allows them to get to know your business and business practices and can assist at the time of a claim or renewal.
Should you have multiple agents quote your insurance?
You should not use more than two agents to quote your insurance at any one time. When you have three or more agents involved in the quoting process, the amount of time the business owner and staff has to commit to answering underwriting questions, allowing time for loss control visits, etc., becomes overwhelming. By limiting yourself to two agencies to quote your insurance the process should be more manageable and effective. It is helpful to have a market selection between the agents, this helps streamline the quote process.
How can you find a knowledgeable agent?
Industry associations sometimes endorse an agency because of their familiarity with the industry. Sometimes the agency has a program specific to that industry as well.
Also, reach out to people you trust, such as your industry peers or another service provider like your banker, attorney, accountant or payroll provider.
Can I keep my current carrier, but change agents?
Business owners may wish to do a request for services (RFS) to determine who they want to represent their insurance needs. An RFS does not involve the marketing of your insurance. It is a process where the business owner may learn of the services and capabilities of multiple insurance agencies. Upon completion, the business owner will make their choice of agency and assign the policies to them to review, adjust, market and service.
Avoiding common misconceptions of the insurance renewal process can greatly reduce time, costs, and stress spent and created at your annual insurance renewal. Being strategic about selecting your agent and quoting your insurance can help you build a strong insurance team around your business, ensure the correct coverage is in place and provide competitive marketplace pricing. ●
Ryan Clugston is a client advisor at SeibertKeck, Best Hoovler McTeague. Reach him at (614) 246-7475 or [email protected].
Insights Business Insurance is brought to you by SeibertKeck
