Most importantly and before we get into anything insurance, I want to wish everyone that has been reading this blog a Happy New Year! I think we can all say a collective “goodbye and good riddance” to the year that was 2020! I, for one, couldn’t be more excited that 2021 is here and am ready to make it the best year this decade has seen! You might be asking yourself… “How will you make that happen?” Well… it all starts right here, right now, with our newest series “How Insurance Works at its Best.” In this edition we will be discussing one of the biggest disconnects between the insurance consumer and us – the importance of being transparent with your agent.
How many of my insurance consumers reading this have, at one point or another, fibbed or “forgot” to disclose something about your business to your insurance consultant? Did you do it consciously? As a consumer myself, I am aware that we can sometimes ask A LOT of questions. Some leave you asking yourself… “did I really need to answer that?” or “why do you need to know this about my business?”. My personal favorite is some variation of the answer, “just get me a quote, you don’t need to know anything else about my business.”
While these questions might seem unimportant or too personal to you, they are more often than not a vitally important aspect of getting you the correct insurance. Just as in life, you get what you pay for. In this context I am not referring to the price of your policy, but I am referring to the attention to detail of the insurance consultant you’re working with and your openness as the insurance consumer. If someone takes 5 minutes to quote your insurance, do you think they fully understand the risks and exposures your businesses faces? My money is on NO.
Let’s consider this example. A furniture store owner calls Park & Associates for a quote on their business insurance. After getting their contact and basic information, the insurance consultant begins to dig deeper into their business. When getting to their property exposures the consultant asks:
“What is the total value of the personal property your business keeps on premises that would be considered yours?”
The owner responds, “we have $100,000 at any given time of such property.”
The consultant follows up with, “can you tell me more about that property?”
The owner responds with “It’s just furniture. Get me a quote, you don’t need to know anything else.”
Now, if the insurance consultant were to take this owner at his word and quote $100,000 of Business Personal Property coverage would they be getting the correct insurance for this business? The answer is maybe… most likely not. For the purpose of this example, let’s say the owner forgot to specify that the $100,000 figure he provided actually included $30,000 of property he is fixing for his clients. He did this because he assumed the furniture was “his” since he assumed control of the property to fix it. In the event of a covered claim, this would result in $30,000 being potentially exposed and uncovered because it was incorrectly classified on the policy. If the owner would have given the consultant a bit more time and attention, this error could have been avoided along with $30,000 and a lot of headaches for both parties. They would have uncovered this discrepancy and made sure to put $70,000 of Business Personal Property Coverage and $30,000 of Personal Property of Others (Bailees) coverage on the policy.
Why is this so important today? With the South Florida insurance marketplace becoming harder by the day it has never been more important to be FULLY transparent with your insurance consultant. As your insurance consultant, we are on your side. We are here to advocate on your behalf. Your being transparent with us allows us to fully do our job. Imagine the Miami Heat going into a playoff game without watching game tape, researching their opponents, and without practicing. That is essentially what is happening when not being fully transparent with your insurance consultant about your business. We are then unprepared to negotiate the best terms and pricing for your business.
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Written by Robbie Korth
If you have any questions, please feel free to contact Robbie Korth at rkorth@parkassociates.com