We all have to buy insurance, but it can be a frustrating experience. You can’t just hop into the local big box store, pull the policy you want off the shelf, and be good to go.
One of the attendees at a recent class sent a note asking about insurance:
I’m running a possible class topic by you since you asked in the last class. It’s something that frustrates me, although perhaps it’s something other people don’t have a problem with . . . choosing insurance and working with brokers.
Currently we are having a great deal of challenge choosing a commercial auto policy through our broker. Both because we are a small company and also because the companies we have been with have left the state or chosen not to stay commercial. So we’ve gone through several changes . . .
So maybe the topic would be choosing brokers, what to ask, what to ask the broker when choosing insurance. I could come up with more if you think it’s a viable topic. The broker supposedly works for us, yet I get nervous to ask him too much. For example, I know the insurance comes up in November. I start reminding him early and he waits until there is little time to have more choices and make decisions.
She’s right to begin the renewal process early. You want to start the process about 3-4 months before the renewal is due. Waiting until the last minute puts you at risk of having to take whatever policy the agent or broker throws at you. As she said in her note, “I start reminding him early and he waits until there is little time to have more choices and make decisions.”
When you ask for the quote, give them eight to ten days to get back to you. That quote, by the way, should be in writing so you know exactly what type of coverage is included in the policy. If they give you any static, like “We can’t get your quote done that quick” or “We can’t get a quote from our underwriter that soon,” respond with, “Ten days is plenty of time. If you can’t get it done by then, we’ll look elsewhere for a policy.”
You’ll hear back from the good agents or brokers in your time frame. Some deliberately wait until the last minute knowing that it limits your ability to shop around. They know they don’t have to be competitive because you’ll have to buy from them. You don’t have time to find another policy. These agents aren’t ones I’d want to do business with.
Make sure the quote is in writing and you understand it. You want to know what’s covered and more importantly, what isn’t covered. Ask questions; a good agent or broker can clearly explain anything you aren’t clear on or don’t understand. You need complete answers, so ask until you’re satisfied the coverage is what you want and need. Expect the same attention to detail for your policy as your customers expect from you.
Keep in mind that agents or brokers who represent multiple carriers are usually paid on commission and will be more responsive. Agents who represent a single insurance company are sometimes paid a salary and might not be as concerned about your ongoing business.
Purchasing insurance is never fun and I doubt it will ever get easier. Be grateful it only happens once a year.
The knowledge and experience Michael Stone gained in his 60+ years in construction has helped thousands of contractors improve their businesses and their lives. He is the author of the books Markup & Profit Revisited, Profitable Sales, and Estimating Construction Profitably, and is available for one-on-one consultations.
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