Many people look for cheaper options when their insurance premiums go up, but how do you know if you’re shopping for insurance correctly? I sat down with Don Blizzard, our risk management advisor and most recent hire for his perspective.
What are the most common mistakes that people make when shopping for insurance?
- Making it all about the price. Anyone in the business knows that customers want a good price, you never need to say it. Saying it to the wrong agent can lead to gaps in coverage to meet price expectation.
- In commercial lines, calling multiple brokers. Most carriers will only quote your account for one broker, so find one you trust and work with them for the carriers they represent. This way, they can leverage them on your behalf and show you everything rather than you having to sort through offers from 4-5 brokers and figuring it out on your own.
- Withholding information – always tell your broker everything.
- Not allowing yourself and the broker enough time. You’d never go to a car dealer and say, “this is what I need and I have to buy something today,” and expect to get the best results. One of the biggest benefits to working with a broker is being able to explore multiple options, and doing that effectively takes some time.
What is the difference between an agent and a broker?
- Most people who aren’t in the industry use the words interchangeably. The biggest difference between the 2 is who they represent. Insurance agents represent the insurance company, insurance brokers represent the insurance buyer.
How often should I shop/review my insurance policies?
- In general, it’s a good idea to shop your rates every 3-5 years. Some companies give better pricing to clients who have been with one insurer for 3 years or more. Some let you earn discounts like accident forgiveness, for example. If you have a good broker, they’ll usually let you know when another carrier they have may be more competitive.
How do insurance companies decide on my premium amount?
- Loss history is obvious in both personal lines and commercial insurance; if you’ve had a lot of claims, you will pay more. One factor a lot of people don’t know about is, in personal lines, credit/debt-to-income ratio plays a huge part in your rates.
- For commercial accounts, the size, location, and annual revenue of your business have a direct impact on your premium. For example, a business located in Philadelphia will generally have higher premiums than a business located in Media, PA. Companies in the city are seen as a higher risk, so they are expected to pay more.
What are the pros and cons of shopping for insurance online?
- I honestly can’t think of a pro other than you might be able to do it after hours or get a rate faster.
- There are too many cons to list. The purpose of insurance is to transfer risk to the insurance company in order to protect your assets. That’s not something that should be taken lightly or done online unless you really know what you’re doing.
What should I look for when deciding on a broker?
- First and foremost, ask friends and family for a referral.
- Talk to several brokers and tell them what you’re looking for. Every agency does things differently, so find one that works for you.
- Don’t assume bigger is better. Choose a broker that’s going to give you the attention you want and deserve. Big agencies can be great, but are you going to be a priority to them if you’re not what they consider a “large” account? Probably not…
Should I have all of my insurance policies with one agency?
- It is a good idea to have all of your personal and commercial insurance with one agency. It doesn’t necessarily need to be with the same insurance carrier within the agency, but having one set of eyes on everything helps to make sure that there are no gaps in coverage.
Call Risk Averse Insurance in Media, PA to discuss your business or personal insurance.
Risk Averse Insurance is an insurance agency in Delaware County that specializes in providing high-quality insurance products at an affordable price.