Tuesday, December 7, 2010

How Do You Choose Your Insurance Agent?

In this advertising age of talking lizards, sarcastic Neanderthals and funny fowls you may believe that anyone can sell you insurance and you’d be mostly right. Many people view insurance as a commodity and feel that it is all the same with no differences other than the price. The truth is that insurance is vast and complex. If you’ve ever tried reading any one of your policies you’d know what I mean. Many policies give coverage to you, take it away in an exclusion and then may turn around and endorse the coverage back on elsewhere in the policy.

As a society we look to CPAs, attorneys, and financial counselors as our trusted advisors and pay top dollar for their services while giving the insurance bid to the lowest priced agent. From an insurance standpoint each person has a unique situation that requires special treatment. A catchy jingle, humorous advertisement or celebrity endorsement is not going to guarantee that a claim is paid.

The best way to make sure that a future claim will be handled correctly is to have a good ongoing relationship with your insurance agent. Your agent should have an understanding of your daily operations and the risks that are involved in running that operation. The agent should also be familiar with insurance. He or she may not need to be a walking encyclopedia of insurance information, but should be able to look at your policy and point out where you may have coverage issues. Having the correct limits and values on your policy is only the first step in the insurance equation. What good are those limits if the coverage is unavailable at the time of loss due to exclusion or other limitation in the policy?

Treat your agent as you would any other trusted advisor. Sit down and go over your coverage, ask questions, and let them know the entire picture. Also, consider narrowing down the number of agents you are using. How may CPAs do you have? How may attorneys? Why should you have multiple agents covering your needs while each of them only knows part of the story on how to best protect you, your family and your business?

If your main insurance concern is price, just remember, that sometimes you get what you pay for. Don’t get burned over a few dollars. Hire a professional to service your insurance needs.

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Post your insurance questions.  I am happy to help if I can.

Steve

Saturday, November 20, 2010

Insurance Tips for Business Owners

As a business owner your primary responsibility is to make sure the business turns a profit. You may be inclined to let a subordinate handle your insurance purchase, but ultimately you are the one responsible for how to cover your business. Here are a few practical things that you should keep in mind when it comes to your insurance policies.

#1) Don’t turn in small property claims. You’re asking the question, "Then why do I pay for insurance?" The Answer: You are paying to take care of those mishaps that would be a financial burden to handle on your own. Consider raising your deductible which keeps your claims frequency down and help lower your premiums. A lower claim frequency may allow your agent additional options when looking at other insurance carriers.

#2) Know your liability limits. Do you have enough to cover a large loss? Look at your policy and ask your agent for a quote on higher limits or an umbrella policy. You will be surprised at how little the cost is for some extra peace of mind.

#3) Insure your property to value. Even with replacement cost coverage the company will likely only pay the limit on the policy. In the case of a partial loss you could be assessed a penalty if you are not insured to value. For example, a business has a $100,000 building and only wants to cover the building for the bank loan of $50,000. A fire destroys half of the structure. Which half burned down, your half or the companies’ half? You can see the dilemma.

#4) Pay your bills in a timely manner. Although many companies have a grace period you should always have your payments in on time. The company is not required to reinstate your policy which may cause a lapse in coverage and a claim might not get paid. This also may make it more difficult for your agent to obtain replacement coverage.

The best advice is to always communicate with your agent and have a working knowledge of your coverages.

Steven Naught, is a Certified Insurance Counselor with the Naught-Naught Insurance Agency. He can be reached at 573-348-2794 by email at stnaught@naught-naught.com or online at http://www.stevenaught.com.