1. You must shop around for your insurance coverage.
Staying blindly in the same business year after year will rarely, if ever, have the best coverage at the best rates. I suggest you bring in 3 agents a year, or at least every two years, to review your insurance needs, recommend coverage and cover the costs. I would bring a regional independent agent, a largely independent and a carrier’s agent directly. By doing this, you accomplish a number of things. First, you shop for the best costs. But, secondly, and more importantly, you want to know which cover each will recommend. This will help you determine if your current coverage is adequate, whether you are over-covered or under-covered. If all three companies recommend the same levels of coverage, you are probably safe. If two of the three recommend higher or lower coverage levels then you have, you’d better know why and see if you agree.
You do not need to be an insurance expert as long as you are dealing with someone who is. You want to use their expertise and at least every two years, that’s exactly what you’re going to do. You want everyone to provide you with a complete written proposal that includes the recommended coverage, an explanation of these recommendations and the corresponding costs. Without costs for each area of coverage, you will have no way of effectively evaluating one company over another, and you will lose the option of choosing policies for different areas of coverage from one company to another.
Remember, you do not need all your coverage with one company. In fact, unless the individual costs are optimal for a company or if a company does not have a specific package for your type of business, you probably should not keep all coverage with a company. There is no reason why you can not get a corporate cover with a company, car insurance with another, and so on. business, even though some policies may cost more would be laziness or convenience that is often nothing more than another form of laziness. I know of one company that has not undertaken a competitive insurance review for more than 20 years. When they did, they saved $ 30,000 a year, almost 15% in this case.
2. Make sure not to ensure too much.
There is no point in ensuring something for $ 100,000 when the replacement value is only $ 75,000. The agent and the company you more than they need. They will not reimburse the premiums if you have overvalued something and therefore too much insurance. It’s up to you to know the value. If you are hedging equipment up to $10,000,000 at replacement cost and the total replacement value is only $5,000,000, that’s your problem. You should know or have a damn good idea of the actual replacement value. The opposite of this is also true, do not be under-insured. Make sure you know if you are insured for replacement value.
This is an area where there are many gray areas. This is another good reason for annual reviews. By doing so, you will get opinions and advice from different sources and inconsistency are much more likely to manifest itself. Remember, do not just ask agents and companies to provide offers on current coverage, but also to evaluate your business, recommend coverage, and define costs.
3. Ask your agent what you can do to reduce your insurance costs.
They will not tell you anything unless you ask. In asking the question, you express your concerns about the costs. The agent dissatisfied with the costs must be interpreted by the agent as a sign that you are looking elsewhere for coverage. The agent suddenly has every interest in trying to reduce the cost control of your business.
4. Look for agents or carriers specialized in your type of business.
Start by asking for suggestions from any association to which you belong. Ask your competitors, your suppliers and even the Chamber of Commerce. If special schemes exist for your type of business, you should be able to achieve significant savings through grouped types and levels of coverage. You will find that the necessary coverage levels are built into the plan and that, if purchased separately, they would cost you a lot more each year. I was able to save over $ 1,200 a year by finding a plan designed to cover businesses in my area.
A note of caution though, just because an agent tells you that they offer a great plan for your type of business, do not assume it’s true. You should always have at least three quotes. The agent with the special plan can just call this to sell you when in fact it’s not that special. The plan may be designed for your type of business but it is too expensive or contains items that might be relevant to most types of businesses in your industry but do not need your business at all.
5. Make sure your insurance covers the replacement value and not the current value.
It may seem like you’re saving money by covering the current value, but if you have a claim and need to replace lost or damaged equipment, you’ll quickly discover that you’ve been very nearsighted. The present value will in most cases be a fraction of the cost of replacing the item. Do not cut corners in this area. Make sure you have a replacement value or at least a coverage equal to the cost of very good used equipment.
6. Remember that bonuses are just another name for payments.
Your goal is to control these payments. Buy only what you need and get them the best value for your purchase. Request written recommendations on coverage and costs and ask the officer to justify these recommendations. Insurance agents are sales representatives. Insurance is their product. Do not forget this. Clear and simple, like any other purchase, you feel that it should justify this purchase.
7. Whenever you have a claim, get your own estimate.
Do not do what most companies do and take everything they tell you that is worth it. This is not an open and closed case, the mere fact that they say it does not do it. By getting your own estimate, you can either check the insurance companies estimate and know that you have a fair settlement, or you can disagree with their costs and fight for a higher settlement. If you simply accept their estimate, you may find that the actual loss involved costs more, much more in some cases.
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