1. It is essential to shop around for insurance coverage
Blindly sticking with one company year after another will not result in the best coverage or the lowest rates. It is a good idea to bring three agents every year or less to assess your insurance needs and recommend range.
I would invite an independent regional agent as well as a significant independent and the carrier’s agent. This will accomplish a lot of things. You are looking for the lowest prices. You are also looking for the best coverage. This will allow you to determine if your current range meets all requirements and if you are under or over-covered. You are safe if all three companies recommend the same level of coverage. You should ask if two or more of the three companies recommend a higher level of coverage than you do.
As long as you are working with an expert in insurance, you don’t need to be. This is why you should seek out their expertise at least twice a year. Each company should provide a written proposal that includes recommended coverage, costs, and explanations. You will not be able to evaluate each company and will no longer have the ability to choose from different coverage areas.
You don’t have to keep all your coverage with the same company. You should probably not have all your coverage with one company unless you can save money on individual services or if one company offers a package plan that is specifically tailored for your business.
There’s no reason to have auto and business coverage from different companies. Except for significant discounts, there is no reason to purchase all insurance from one company.
One company I know had not done a competitive review on their insurance in over 20 years. They saved $30,000 per year or nearly 15% in this instance.
2. Make sure you are not over insuring
You don’t need to insure $100,000 for something that has a replacement value of only $75,000. Agents and companies will not pay more than they need to. If you have overvalued an item and are therefore ineligible for a rebate, they will not reimburse your premiums.
You can determine the value. You have a problem if you only cover equipment up to $10,000,000 at replacement value, and it has a total replacement value of $5,000,000. The natural replacement value should be known or easily estimated. You should not underinsure. You should verify that you are covered for replacement value.
This area is prone to gray areas. Annual reviews are a good idea. These reviews will provide you with advice and opinions from many different sources, making it much easier to spot inconsistencies. Don’t ask companies or agents to give you quotes on current coverage. Instead, evaluate your operation and offer coverage recommendations and costs.
3. Ask your agent about ways to lower your insurance costs.
They won’t tell if you don’t ask. You are asking because you have concerns about costs. The agent should interpret your dissatisfaction with costs as a signal that you will be looking elsewhere for coverage. Agents suddenly have a lot of incentive to lower your Business Cost Control.
4. Find agents and carriers who specialize in your business type.
Ask any association that you are a member of for recommendations. Ask your suppliers and competitors for suggestions. Bundled types and coverages may be available for businesses that have special needs. The plan will provide the coverage you need and is much cheaper than buying them separately. I was able to save more than $1,200 per year by choosing a plan that covers companies in my industry.
Be aware that agents may not always be honest when they say they have an excellent plan for you. It is essential to get at least three quotes. You should still get at least three quotes.
5. Ensure that your insurance covers the replacement value and not the current value
Although it may appear that you are saving money by covering current value, if you have to replace equipment due to damage or loss, you will soon realize that you were very shortsighted. In most cases, the current value of an item will be less than the replacement cost. This is an area where you should not cut corners. You should have at least the same coverage as what it would cost to replace excellent equipment.
6. Premiums are just another term for payments
You want to manage these payments, buy only what you really need, and get the most for your money. Ask for written recommendations about coverage and costs, and have the agent explain these recommendations to your satisfaction. Insurance agents are sales reps. Their product is insurance. This is a fact you should not forget. This purchase should be justified, just like any other purchase.
7. Get your estimate whenever you file a claim
Do not follow the lead of most companies and accept what they claim to be worth. It is not an easy case. Just because they claim it doesn’t mean it is. You can verify the estimate of the insurance company and be sure you are getting a fair settlement. Or, you can dispute their estimates and demand a higher payment. Accepting their assessment may lead to a higher loss in some cases.
Derrick Welch, the author of “In Pursuit Of Profits: How at Least Double Your Profits without Increasing Sales,” provided this edition of The Welch Report. This report includes 1,000 cost control, expense reduction, and income-producing strategies you can start using today to dramatically increase your bottom line.