I am in the middle of about 150 different insurance bids (slight exaggeration) and one thing is standing out, agreed amount.
First, coinsurance is a penalty. Having the coinsurance penalty in a property insurance program never helps the insurance buyer.
Agreed amount removes the penalty. It is a good thing for insurance buyers.
I am amazed at how many agents deliver proposals with a coinsurance penalty. There are maybe 1 in 1,000 accounts that should not have agreed amount - from the insured's perspective.
I no longer provide bid specifications when I am getting competitive quotes for a client. I let the agent design the insurance program so I can see what kind of insurance brain an agent has. Proposing a policy with a coinsurance penalty does not impress me.
In my blog - http://www.InsuranceAssuranceBlog.com I have advised insurance buyers to call their agent and ask if their property insurance has a coinsurance penalty. This single mistake is so basic as to be almost a litmus test to determine if an agent is looking out for his client's interests.
Insurance Assurance℠
June 2009
Issue 108 Since the Year 2000
Insurance Agents
I'm often asked what I look for in an insurance agent for my clients. Here is the list, in no particular order:
-A student of insurance. Someone who reads and studies the policies they sell. They also have an industry designation like CPCU of CIC or are working to complete one (or more).
-Interested in business. Recall that I deal mainly with business insurance. The agents I lean towards have an interest in commerce and business. They have an interest in learning what makes their clients successful. Reading the Wall Street Journal seems to be the bell-weather.
-An understanding of finance. Insurance is a financial instrument. Much of what we do involves money and finance. An understanding of the basics of business finance is vital - how to read a balance sheet, how to read an income statement, what is cash flow.
-Responsiveness. When a client calls, the great agents respond. This is not fancy - return a phone call in a few hours and an email within a day.
-Proactiveness. They don't wait for the client to ask. They provide annual reviews of coverage to be sure all is as it should be. They are constantly looking for ways to mitigate their client's risk.
-Access to markets. An insurance agent can only provide what his fleet of insurers allows. A great agent has access to a diverse group of insurance companies and strong relationships with those insurers.
-A communicator. It's a basic skill, but lacking in many insurance agents; the ability to convey ideas and information clearly - verbally and in writing.
The above is what I look for in agents for my clients. For my own interests, in addition to the above for my clients, I want an agent to bring me ideas and information. It tells me that an agent has my interests in mind when they send me articles and white papers they find that they think will be of interest and help to me. I never accept gifts from agents - I do accept information and ideas.
Agreed Amount
I regularly participate in an online forum of insurance people on the Insurance Journal website. Quite often I post to spark debate and discussion. Recently I put up a screed on a coverage concern I find way too often in the insurance programs I review.
The responses I received - both on the forum and by email - included many defenders of coinsurance. Though nobody could argue with the idea that having coinsurance on a policy is good for the insurance buyer.
I say again, ask your agent if your insurance program includes coinsurance. If the answer is yes, ask why.
The insurance buyer's best interest is my only interest.
Insurance Assurance℠ Workbooks
A few months ago I announced my Insurance Assurance℠ Workbooks as an effective way for small businesses to judge and improve the quality of their insurance programs without spending thousands to hire me. The response has been amazing.
At $99, the digital edition is proving to be very popular.
The idea is simple. Insurance buyers have trouble coming up with the right questions to ask their agents. My workbook gives them the questions, along with insight into the coverages that are important to consider.
Business Insurance Audit Toolkit - For Small and Medium Sized Organizations of All Types. Digital and Softcover Editions
Bank Insurance Audit Toolkit - For Bankers Who Manage Their Bank's Insurance. Digital and Softcover Editions
Insurance Help Topics - From WWW.InsuranceAssuranceBlog.com
Commercial Auto Insurance Coverage Symbols
Collision Damage Coverage for Rental Cars
It is all there for you to use for free - www.ScottSimmonds.com and www.InsuranceAssuranceBlog.com.
www.BankInsuranceBlook.com. - The blog version of my book, Simmonds on Bank Insurance. A comprehensive buyer's guide for bankers who buy insurance for their banks.
www.WorkCompBlook.com. - Blog version of Simmonds on Workers' Compensation Insurance. How to manage and buy workers' compensation insurance. Filled with information to control your work comp costs.
Your comments and suggestions are always welcome.
Regards,
Scott Simmonds, CPCU, ARM, CMC
"The Guy with the Big Insurance Brain"
Providing Unbiased Insurance Assurance℠
Phone 207-284-0085
Fax 802-992-4027
Scott@ScottSimmonds.com
www.ScottSimmonds.com
www.InsuranceAssuranceBlog.com
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