Is your insurance agent reassuring?
Posted on | January 28, 2009 | 33 Comments
How do you know if your insurance agent sold you the right insurance coverage?
You’ll never know for sure, unless you suffer a casualty, loss or judgment. Or, you can follow the instructions in this blog!
I am a huge proponent of getting insurance to cover your personal and business risks. But, the key to insurance is getting the right type and the right amount of coverage.
Let me illustrate these lessons with the story of two of my clients: Fred and Bill.
THE STORY OF FRED – BUYING THE WRONG COVERAGE. Fred ran his business out of a spare bedroom in his house. Twice each week, Fred had a few contractors come to his home for business meetings. One winter day, Fred’s favorite contractor (Stanley) walked up Fred’s driveway, slipped on some ice and broke several bones. Stanley had no disability or health insurance, and was out of work for weeks. Stanley, being self-employed and thus unemployed, turned to Fred: “Hey Fred, I got hurt because you didn’t clear your driveway of ice. Can you pay me my lost income, while I heal?” Fred calls his insurance agent and makes a claim.
BUT THERE’S NO COVERAGE FOR FRED! Fred’s homeowner’s insurance doesn’t cover business risks. Stanley is a business invitee. There’s no coverage for a business invitee who gets hurt doing business at Fred’s home.
THE STORY OF BILL- BUYING TOO LITTLE COVERAGE. Bill owns a business- a restaurant. One day, there is a grease fire in the restaurant and Bill loses $225,000 of equipment and tools (stoves, ovens, utencils, pots, pans, etc.) and $150,000 of leashold improvements (plumbing, carpet, walls, restrooms, etc.). Bill calls his agent and makes an insurance claim.
Then Bill gets the bad news- Bill has $200,000 of coverage on equipment. He’s short $25,000 of coverage. But the insurance agent has some good news. . . there’s $300,000 of coverage on the improvements.
What?
What?!
What?!!!!
Bill was UNDER-insured on equipment and OVER-insured on improvements. What a waste.
Could Fred and Bill have done something differently? Was this the agents’ fault? Do these situations happen often?
Yes. Maybe. And yes.
There are solutions. There is a better way to communicate with your insurance agent in developing a great business insurance plan. Stay tuned to this blog. I’ll cover these topics in future blogs. For now, you should recognize the importance of buying the right TYPE and AMOUNT of coverage.
CHECK OUT OTHER ARTICLES I’VE WRITTEN ON IMPORTANT BUSINESS, REAL ESTATE AND LAW-RELATED MATTERS: http://indiana-attorneys.com/articles_news/index.htm
Comments
33 Responses to “Is your insurance agent reassuring?”
Leave a Reply
Meet Matt
Expert Author
Categories
- Asset Protection (39)
- Business Attorney (24)
- Buy Sell Agreements (4)
- Cash Flow (11)
- Contracts (19)
- Insurance (10)
- knoMINGO.com (2)
- Law (54)
- Marketing (15)
- Property Management (1)
- Real Estate (43)
- Small Business (54)
- Taxes (2)
- Uncategorized (31)
- Videos (2)
January 29th, 2009 @ 8:17 pm
Hi. was very well written.
January 31st, 2009 @ 3:13 am
Actually it might be my current insurance agent that doesn’t trust
me. When my former insurance company doubled my yearly premium on my homeowners and car insurance without ever having filed a claim in the 20 yearsk we were insured, I canceled my policies and went with another carrier.
I was very proud of our family record of never having filed a claim, but that was not the case 10 months later when at 2am April 22, 2005, lightening struck our house outside our bedroom about five feet from the end of our bed. There was minimal structure damage; however, the personal property claim was high. The following year our home was hit by a hail storm and then the year following that it was hit again but by a wind storm. The insurance company had to put on a new roof.
The only regret I had was that all these claims didn’t happen in enough time to stick the old insurance company with them. With three homeowners claims in three years totalling approximately $20k my premium only raised 20%.
February 3rd, 2009 @ 8:18 am
Nice job. I completely agree with you.
February 4th, 2009 @ 4:29 am
was interesting. You seem very knowledgeable in casualty insurance agent.
February 5th, 2009 @ 10:36 pm
Very Good Stuff… I read most of your blogs. Are you currently working with or recommending any Insurance Agents or Planners for referrals? I work with some good P&C guys and I do Life & Health Insurance Myself special attention to BUY SELL agreements and Estate Planning.
We chatted at Rainmakers a few months ago.. I would love to catch up again.
I have some P&C stories from all of the above.
February 6th, 2009 @ 9:53 am
Ben, thanks for the comments. I’m always looking for good professionals in other disciplines to whom I can refer clients. I believe in “givers gain.” I’ve refer to other professionals who treat clients well, deliver value and remember me in return.
Thanks again. Please feel free to contact me by email.
February 9th, 2009 @ 8:17 pm
made some good points. I did a search on insurance and online and found most people agree with your blog.
February 10th, 2009 @ 12:20 am
I think you did a great job writing . Bravo.
February 10th, 2009 @ 4:17 am
Hey! was very well written. Good job.
February 10th, 2009 @ 9:45 am
Thanks for the kind comments. Please keep in touch.
February 10th, 2009 @ 9:46 am
truly. . . thanks for the comments. Please keep in touch and keep reading my blogs. thanks
February 10th, 2009 @ 12:17 pm
Hey!. was very well written.
February 10th, 2009 @ 12:17 pm
You are a very smart person!
February 10th, 2009 @ 12:39 pm
Now whom am I to disagree with you?
Thanks. Please keeping reading. And pose business questions for me to answer.
Ask Matt!
February 10th, 2009 @ 12:41 pm
Thanks Kelly.
I appreciate the comments and compliments. Please keep reading my blog and let others know about it.
Thanks!
February 10th, 2009 @ 4:17 pm
was interesting. You seem very knowledgeable in your insurance agent.
February 10th, 2009 @ 4:18 pm
I loved !
February 10th, 2009 @ 8:17 pm
You are a very smart person!
February 11th, 2009 @ 12:17 am
Hi there You did a great job with this blog. I loved
February 11th, 2009 @ 8:17 am
Hello was very well written. Good job.
February 11th, 2009 @ 1:24 pm
Thanks Frank. Plese keep reading my blog. I appreciate the support and kind comments.
February 11th, 2009 @ 8:19 pm
Hello. Great job.
February 12th, 2009 @ 8:17 am
Hi. Great job.
February 13th, 2009 @ 8:17 pm
made some good points. I did a search on what do insurance agents do and found most people agree with your blog.
February 15th, 2009 @ 4:17 am
I loved !
February 15th, 2009 @ 6:23 am
Sunday I was looking for sites about Home Contents Insurance and specifically about home insurance online and I found your site.
February 15th, 2009 @ 8:17 am
There is obviously a lot to know about online insurance companies. I think you made some good points in
February 15th, 2009 @ 7:26 pm
Thanks for reading, Jim. Hope you come back to this site and read more.
February 16th, 2009 @ 4:17 am
I am not sure I totally agree with
February 16th, 2009 @ 4:17 pm
Hi there. Great job.
June 14th, 2009 @ 11:28 pm
[...] you meet with your agent, please review this post- Is Your Insurance Agent Reassuring. In that post, teach you how to communicate with your agent in order to make the most of insurance [...]
August 7th, 2009 @ 1:06 pm
[...] Here’s another post on the topic of insurance- Is Your Insurance Agent Reassuring? [...]
January 13th, 2010 @ 3:29 am
Matt, great blog entry on “Is your insurance agent reassuring?”. Good illustration of risk of not have right Type and Amount of coveratge.
In keeping with this theme and your closing comment … in a future blog entry would you considering providing an overview of the main topics / ingredients we need to consider in developing a solid business insurance plan and the risk factors we should focus on mitigating? And are there any good books or reference materials on this topic you can recommend?
Thanks ahead for your consideration and any feedback you may provide.