Today, we’re going to cover a common misconception in the insurance buying process – hiring multiple agents. We will be discussing how using multiple agents negatively impacts your business, and get into why you should consider hiring one broker and one broker only.
When speaking with prospects, it is common to see them utilize this approach. In their minds, approaching multiple agents and having them each provide their “best” quote option is a sure-fire way to get the best coverage available for the best rate. On the surface, this makes sense. If you were hiring a contractor to remodel your kitchen, you would go to contractor A, B, and C and get quotes. From there, you’d choose the one who gives you the best pricing, simple. However, this approach doesn’t work when purchasing commercial insurance. In fact, using multiple agents can be a tremendous disadvantage for your business.
Using multiple agents is harmful for 3 main reasons:
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You, as the business owner, are forced to be the insurance expert.
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It is your job to compare option A to option B and understand the differences between the two. Insurance policies are contracts that contain complex language and insurance terminology regarding coverage triggers, exclusions, deductibles, various coverage amounts, and more. It is your responsibility to fully comprehend the different options, and ensure that your business would be covered in the event of a claim.
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You severely limit your chances of receiving the best possible option for your business. When purchasing insurance, business owners typically are looking for the best coverage for the best price.
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The ideal combination of making sure you have adequate coverage for the exposures you have, while not overpaying for your insurance. Studies conducted by a renowned insurance consulting firm, InCite Performance Group, show that if you were to have 3 different insurance agents get quotes from 3 different insurance carriers you have a less than 12% chance of obtaining that outcome.
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You limit your control on how your business’ story is communicated to the insurance company.
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Each business has its own unique story and attributes that differentiate it from every other company. Having an agent who specializes in your industry, knows the risks and exposures you face on a daily basis, and understands your company is key to your success. This expertise on behalf of the agent is crucial to making sure your business is covered properly and being accurately represented to the carrier. The agent also plays a vital role in communicating with the insurance company on your behalf to show them why your business is a great risk that deserves preferential pricing due to your best practices.
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Bottom line is: having an agent that understands your business, your industry, and your insurance marketplace is absolutely critical.
Unfortunately, the insurance buying process has become commoditized. Businesses are focusing more on price than they are total-cost-of-risk. Given the current state of the insurance marketplace with rates and premiums on the rise, claims becoming more and more common, and everchanging and evolving exposures – now more than ever it is crucial to have an agent who you can trust to properly protect your business.
A Risk Management Consultant role extends way beyond the scope of an insurance policy. It is my job to understand your business, your industry, and utilize Rue Insurance’s proven Be Ready Process to help you proactively manage your business’ risk.
When purchasing insurance, it is important for you to select the right agent for you and then work with them to find the best carrier. Your singular agent is then responsible to compare the various insurance quotes they obtained and explain the pros and cons to you. They are responsible for ensuring you receive the best coverage for the best price. And they are responsible for advocating on your behalf to the insurance carrier to fight for you and represent your business in the marketplace.
Selecting one agent gives you, as the business owner, more control and bargaining power over the insurance buying process. It allows you to directly impact your coverage and pricing, and provides you with the peace of mind of knowing for certain that you are properly covered. Choosing one agent to be your trusted advisor will pay off in more ways than one.
Image by Antoni Shkraba on Pexels.
About the Author:
Brian Ciarrocca is a Risk Management Associate at Rue Insurance. He joined Rue Insurance in 2020 with licenses in Property, Casualty, Life and Health. He is CRIS certified (Construction Risk Insurance Specialist). Armed with a deep understanding of safety centric risk management principles, Brian possesses a unique expertise in identifying, assessing, and mitigating risks for his clients.
