Be an Informed Buyer
If you are complacent, you simply may be uninformed about how negotiable contractor insurance is. Ignorance about what the competition offers can be very expensive. Hundreds of people might say they are perfectly satisfied with their insurance programs, only to find their programs are riddled with shortcomings. When alternative opportunities become apparent, they find greater satisfaction than they or their agent had imagined possible. When handling contractor insurance, you can pay a high price for being misinformed or underinsured.
Most businesses do an inadequate job shopping their insurance accounts. A large number of small business owners hope their agents have their best interests at heart. Other businesses try to be thorough, and occasionally may shop several places. They find the whole process frustrating and time consuming, and decide to move on to more productive efforts. Most businesses have invented their own purchasing methods, based on limited trial and error efforts. Many of the methods do not adequately address the problems. You need to know how to effectively shop the marketplace and systematically manage business insurance.
Naturally, the profit-making providers of contractors insurance services have not taught people how to get a less expensive deal elsewhere. In practice, agents and brokers do not work for you, or for an insurance company — they work for themselves. While the agents know they must have your price low enough to win and keep your business, further reductions in price directly reduce their commission paychecks. How many agents are willing to put in extra time and effort only to reduce the size of their own paychecks?
When writing your account, insurance company underwriters want the premium you pay to be as high as the market permits. Most underwriters do not volunteer their best available bargains; however, for those agents who know how to ask the right questions, an underwriter may reluctantly grant any available bargain. Most underwriters are not fond of a soft market, in which the prices spiral downward. To keep writing business in the soft market conditions, the underwriters slightly undercut their competition — just enough to reach their stated corporate objectives of increased written premiums. For instance, when faced with losing an account, they are sometimes willing to make concessions in your favor — which can be very meaningful to you — while serving their own interests. If you are prepared with concrete alternatives, you can help convince underwriters to apply maximum discounts on your contractor insurance.
The insurance marketplace is simply too large for any one person to be aware of all the possible solutions for every situation.
Refer back to this site as often as you need assitance with your renewal control efforts. Let us know if you need any questions answered.
We are here to help.
To Your Prosperity!
Don Bury, President
Insurance Cost Reduction Services
donbury@icrs.biz
Get The 5 Questions That Cause Insurance Brokers To Go Scrambling To Lower Your Costs.