Each day this week, I am walking you through my steps to a successful insurance check up, which may save you $100s on insurance. Step one is go to my Web site and learn what you need to know about insurance coverage to save you money, & avoid headaches when you have a claim. Step Two is knowing what to expect during your insurance policy review.
Now, you are ready for step three.
Step 3: Saving money on the insurance coverage you need during your insurance policy review.
In Step 2, I told you to expect your insurance agent or company to recommend additional coverage or policies you need.
In addition, a good insurance policy review should cover reviewing each coverage, not only to see if you need more coverage, but to see if you still need the coverage at all.
For example, if you are paying $200 every 6 months for Collision coverage, with a $500 deductible, on an old car worth only $1,500, your agent should discuss with you whether you still need the coverage.
Also, a good insurance policy review should cover all the policy exclusions and limitations. You should be informed of all additional coverage available, and your agent should ask you questions to determine your insurance needs.
Finally, a good insurance policy review will focus on getting you the best price possible for the coverage you need, by making sure you get all the discounts for which you qualify, what you can do to get additional discounts, and inform you of any new products available which can replace your policy with a lower price.
Unfortunately, some agents & insurance companies sole focus is to sell you additional products & coverage during policy reviews.
Agents may talk about insurance policy discounts you can get by buying an additional policy, like a multi-policy discount, but if you seem like a content customer, not willing to shop for lower rates with other insurance companies, your agent is not likely to ask you questions to find out about all the discounts offered. This happens, not because agents (at least not ALL agents) intentionally want you to miss out on a discount and pay a higher premium. The agent’s main role is to get you the coverage you need, determine your eligibility, and quote you the correct price. This takes time, and it’s easy for an agent to miss discussing a discount for you.
For example, I had a customer paying a lot for car insurance, because he had several new cars and 2 teen drivers in his household. I enjoy doing insurance policy reviews for customers, and I have always prided myself on being thorough, and getting my customers all the discounts I could get for them.
I never needed to schedule a policy review for this customer, because every 6 months, when the customer received their auto insurance renewal, he would come into my office and complain about his auto insurance rates going up. I would review his auto insurance policy, and I always seemed to find a way to get him a lower rate, without reducing his coverage.
The first time he came into my office, I was able to get him a better price on his policy, but I was new to the agency, and no one had reviewed his policy in a while. 6 months later, he came in when he received his auto insurance renewal, because the auto insurance company had a rate increase. I reviewed his policy, and once again, I was able to find a way to lower his rates. I also noticed in 2 months, I could re-rate one of his teen drivers as being a year older. I followed up and did it, 2 months later, which lowered his rates. When his auto insurance renewed again, his rate went down — but he still pays a lot because auto insurance is expensive for his cars & teen drivers.
Even though his rates went down, he came into my office and complained about his rates going up! I thought to myself: I reviewed his policy twice recently, there is no way I can find him a lower rate. But sure enough, I found something applying now, which did not apply before, which gave him a better rate.
Even though this was a very unusual situation, the moral of the story is the squeaky wheel gets the oil. If you are not having annual reviews focused on getting the coverage you need at the best price, you are likely to be paying too much for insurance.
If you are not shopping for better rates with all the leading insurance companies each year, you are very likely to be paying too much for insurance. Don’t believe me? See why and find out at 8 things every auto insurance buyer needs to know.
Agents are busy people, focusing on finding new customers to stay in business. There are good agents wanting to get you the coverage you need & all the appropriate discounts. But agents are compensated by getting a percentage of the premium the insurance company charges you. The higher your premium, the more money your agent makes.
So, how do you make sure you are finding out everything you need to know about your insurance, and your agent or company is getting you the best price?
Do these 2 things:
A) Have your agent or insurance company give you a copy of your insurance policy contract and all endorsements.
Endorsements are amendments to the wording of your policy contract to change coverage. For example, if earthquake damage is excluded from your homeowners insurance policy contract, paying more for an earthquake endorsement gives you coverage for earthquake, subject to the wording in the endorsement.
Review the policy contract & endorsements, and pay special attention to any exclusions & limitations. Contact your agent if you have any questions or concerns.
B) Here is the key to getting the best price on insurance: After your insurance company reviews your coverage with you, tell them you are happy with their service, but you are shopping around for a better rate with other insurance companies, which you do each year, to make sure you are getting a good price.
Even evil, greedy insurance agents will work hard to get you all the discounts and best price possible, if they think they are going to lose your business.
Some people may be reluctant, particularly if they have been insured with the same agent for years, to tell the agent they are going to shop their insurance.
Politely telling your agent you are going to shop around for better rates is actually a great check of the professionalism of your agent.
Most agents understand customers shop their insurance, and they will respond by trying to make sure they are getting you the best price they can offer you. A good agent will also tell you about benefits to staying with your current policy. For example, some insurance companies provide accident forgiveness at no additional cost, if you have been insured with them for many years.
If your agent says their customer service is worth you having them as your agent, ask for a specific example when the agent’s expertise & customer service benefited one of their customers.
Every insurance company will tell you they have the best customer service. Anyone can tell you they are best at their jobs. People who are really great at their job can prove it to you.
If your agent gets upset about you shopping for better insurance rates, and tries to manipulate your emotions, by trying to make you feel guilty, because the agent questions your loyalty, or your agent claims his family will have to eat dog food if the agent loses your business, you are not dealing with a professional insurance agent.
Allow your agent to get the best price possible for you, and explain to you why you should keep your insurance with the agent.
However, it doesn’t make sense for you to be loyal to an insurance company or agent, because the insurance company will NOT be loyal to you, and they will cancel you, even if you have been a customer with no claims for 30 years, if the insurance company thinks you now have a greater-than-average risk of having a claim. Your agent won’t be much help to you.
Once you have had an insurance policy review, you will be ready for the very important Step 4, and shop for better rates & coverage options.
Don’t wait to save money, or take a chance on not having the insurance coverage you need if you have a claim. Contact your agent and have them review your insurance policy as soon as you can. There is no need to go to the agent’s office, you can get your insurance policies reviewed over the phone.
If you have an agent, you want to have your agent, or someone on your agent’s staff, conduct your policy review. But if you don’t have an agent, because your auto insurance company sells directly, like Amica, USAA, Geico, Esurance, or Progressive, you can call the insurance company, and request the policy review.
The Other Steps:
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