As a dedicated insurance nerd, I can’t help but pay attention to the advertising put forth by both the carriers I represent and those I compete against. For years now, I’ve been alarmed that the message most commonly conveyed by the majority of both centers around a single topic: price.
In the interest of full disclosure, I admit it is indeed tricky business for an insurance agent who is largely paid on a commission basis to raise the issue of consumers saving money on insurance. I am hopeful that by the end of this article, you’ll find my point is not that saving money is bad but that shopping based on price alone might very well be.
For years, a certain insurer whose public face is a 5-inch lizard has claimed that savings on auto insurance can be achieved in just fifteen minutes. More recently, a competing carrier launched an advertising campaign that ridicules the notion that it should take fifteen whole minutes to purchase auto insurance and promises to deliver savings in half the time. Another has a spokesperson who is dressed like a shop girl (apron included) and works in an insurance store filled with nondescript boxes of insurance. This carrier promises you a tool where you get to name your own price for insurance. Not to be outdone, both Walmart and Overstock.com have announced plans to save their customers money via their own online insurance platforms.
In none of the cases above is the importance of coverage ever discussed.
Insurance is complicated and is not a commodity.
Policies can be hundreds of pages long, full of provisions that grant, extend or exclude coverage for particular hazards. Exposures and policy coverage forms are changing all the time, and as an agent of almost twenty years, I learn more about the nuances of the coverage form every year. Further, not all insurers are created equal. Some have a tremendous website or advertising budget but a lousy financial rating. Some offer coverage forms that are not standardized and therefore not comparable to another carrier’s forms without a detailed analysis that assuredly isn’t going to take place in fifteen minutes or less. Most importantly, the exposures inherent to my clients’ businesses and everyday lives also change over time.
In absence of a relationship with an agent or insurer familiar with those changing exposures, I worry about a website or call center employee’s ability to properly cover the consumer.
All that said, whether it is a business or an individual, insurance is expensive and a major item on most annual budgets. Regularly making sure that your insurance is competitively priced, therefore, is sound fiscal behavior.
My recommendation is to keep in mind that you’re not shopping for a commodity like a new car or a 12-pound bag of Cheetos, where all of the retailers you’re consulting are going to deliver the exact same product. In my opinion, the best way to shop for insurance is to work with one (or more) qualified, experienced insurance agents who can properly identify the risks with you, explain the coverage options and approach the marketplace on your behalf to locate the best possible match in terms of both pricing AND coverage. Will that take more than fifteen minutes? Yes. But, you’re worth it.
So, the next time you see the lizard on TV asking you for fifteen minutes, call your local agent instead. If you don’t, I guess you’ll find us at Walmart one day right next to the garden section.
Brian Scarborough is a Principal at Scarborough Insurance, an independent agency that sells all lines of insurance and has been serving the community since 1961. Visit scarins.com for more information.