I must say, transitioning from the education (teaching/coaching) world to the insurance world in 1997 (yes again, I am old!) was an amazing wake up call for me. I immediately experienced the distrust that came with the insurance industry. As my step-dad said directly to my face, “that’s one rung up from a used car salesman.” From September 1997 to current day, I’ve worked hard to change the negative perception of (and in some cases the reality of) bad insurance salespeople. Unfortunately, many in our industry (as in all industries) are not true professionals. These unprofessional order-takers will write any type of policy to get a payday without realizing or caring about the financial devastation to their clients from this malpractice. I see this happen frequently at call centers where customer service representatives are “bonused” if they sell any type of policy. Can you imagine someone putting a client’s lifestyle in danger because of an extra $25 a month?
I lost a client to a national competitor who shall remain nameless but resembles a lizard. The policy was cheaper because it did not include uninsured and under-insured motorists coverage. Those coverages had been stripped from the policy. Do you know that one in five people in Tennessee is not insured? Count the number of motorists you pass on your drive home today? Now divide that by five, and you will have a pretty reasonable estimate. What would have happened if my clients were hit by someone without insurance? It could change their total financial situation. Fortunately, the client let me review the proposal and gladly came back to us once they realized the gross negligence. I see this happen more than I would like to admit.
Minimum Coverage Risks
On a side note, we recently wrote a new client who had state minimum limits and after a discussion, they increased their limits to $50,000/$100,000. About a month after we insured them, his son was in an accident where a tire flew off a car and hit him directly in the windshield driver’s side (yes, he was lucky to live). He had several teeth knocked out and facial lacerations. The other party did not have insurance. Luckily with the increased limits, he had enough money to get his teeth repaired. Can you imagine a 20 year-old without his teeth?
I can’t blame the call centers solely though. I compete against agents all the time who write low liability limits for their clients with major assets. Their clients are at risk should a claim occur. I completed a new business appointment last week with a client who asked for a $1 million umbrella coverage. After completing a thorough asset analysis, we discovered they needed a $3 million umbrella to protect their assets. What if I had just “taken the order” and only written a $1 million umbrella?
It is our duty to be complete professionals and to find the gaps and risk for our clients. I really think agents with a servant’s heart are willing to go the extra mile. I guess it is the old school teacher in me. I see half million dollar homes insured with $100,000 in liability and $25,000/$50,000 written on the auto limits. If you are reading this and don’t know what your liability limits are, look them up or call your agent. I wouldn’t recommend anything under $100,000/$300,000 for your auto limits. Better questions would be to ask your agent what their limits are and if yours are the same? Why would they write less for you than themselves? It should at least be offered.
What about the story where I was asked to “ball park” a flood proposal. Knowing the danger of that, I said it could be between anywhere from $1200 to $5000. Not liking my answer and not wanting to pay for an elevation certificate, the client chose another agent who told them the premium would only be $1000. Guess what the premium was when the flood center completed the policy…..$4800! Do you think that made a difference to that homeowner when the difference in their insurance was $3800 a year? By the time they realized the other agent did not tell them the truth, they had purchased the house and signed the flood contract.
I’m actually almost embarrassed to tell you how easy it is to become an insurance agent. There are various types of licenses, but to sell auto and home insurance, the required attend school for four days and pass an insurance exam. Most of it can be done online now as well. Thank goodness, the test is a little harder now, but that’s the initial requirement. To maintain an insurance license, one must complete 24 hours of continuing education every two years. Now the continuing ed sounds legitimate until you realize you can go online, pay a nominal fee, and get a class that practically gives you the answers. Not much learning occurs in this situation.
I see so many agents totally out of touch. Thank goodness for agents who seek designations in the insurance field to become experts who clients can trust to provide true risk management advice. Some of these designations are time consuming and expensive, so you should appreciate if your agent holds one of these. The Certified Insurance Counselor (CIC) and the Certified Personal Risk Manager (CPRM) are very distinguished designations. Each of these designations require four days in a classroom and passing a very difficult written test with claims and coverage scenarios. The designations also require an annual class to update and stay current with new trends in insurance. These are much more demanding than the easy online classes. There are many good designations, so appreciate if your agent has “letters behind their name.” And yes, I hold both the CIC and CPRM designations.
I hope I have explained that not all agents are created equal, but are all people who purchase insurance the same? I wish I had a dollar (I’d be on an island is the Caribbean) for every time someone said, “can you just give me a proposal?” Sure I reply, “‘you get what you pay for!” How’s that for a proposal…oh you mean, you want us to insure your most valuable possessions? Quick! Quick! Hurry! Hurry!” You are essentially saying to me that you’ve taken years to make enough money and save enough money to purchase a home, but you want me to insure it as quickly and for as little money as possible! Does that make sense to you? I hear this so many times a week. I just want to shake these people and ask if they realize what they are doing. Usually after a conversation and some reference points supported by very scary stories (all of them true by the way!), about half of these people decide to properly protect the home—one of their biggest assets.
I refer to the ones who “get it” as clients and the others as customers. After looking for definitions for these names, I’m thoroughly convinced, clients are the people who appreciate, and actually deserve a true insurance professional. Dictionary.com defines customer as a person who buys goods or services from another person while a client is a person or group that uses the professional services of a lawyer, architect, or other expert. I place trained insurance agents who are willing to offer professional advice in this accomplished category.
The difference between customers and clients can at first seem quite confusing. However, the difference is easily seen in terms of an ongoing business relationship. A person who just purchases goods and services is a customer. A Client seeks professional services from the company. An agency agreement exists between a client and a service provider. Here at Beacon Insurance Advisers, we want relationships with clients.
I had a 30 minute phone conversation with a client last week to decide if she wanted to sell her house or keep it as a rental. We discussed the cost of rental insurance both long term and overnight. With this information she can make an educated decision. This is the relationship you have with a professional agent. By the way, that phone call was on my cell phone at 6:30 p.m.
I’d also like to make the point that if your agent is doing a great job and completing account reviews every few years, please thank them for being a professional. Your agent gets paid every time you renew a policy, and frankly, I think we need to earn our money every year by being proactive and working for you. Sitting back and just collecting a paycheck gives our industry a bad reputation. A great relationship with your insurance agent means open lines of communication with them. It is a level of respect between client and agent that can provide great coverage and also peace of mind knowing you are properly protected.
Just know that a true professional insurance agent is as selective about their clients as you should be about your insurance professional!