In this last decade we have observed even greater pressure to force the price of insurance down convincing the public that they are paying too much through credit scoring in most US states and the advent of picking your insurance by what you are willing to pay. You might be thinking what is the harm in that? The free market is good for everyone, isn’t it? Credit Scoring is a statistically proven concept whereby the consumer with lower credit scores is statistically shown to have higher levels of accidents and violations. Credit scoring has done a remarkable job of lowering insurance costs for those with the highest credit scores. Insurance companies advertise the insurance savings based on the very best credit scores so when they say that you could save $400 on your insurance premium it is based on those with the best credit scores however the vast majority do not enjoy those savings and this is the big lie in insurance.
The conversation with the public is all about price and not about the insurance coverage and this is my biggest fear. When price trumps the conversation about being properly insured you end up with the consumers not being protected during a claim. And it reinforces that insurance companies and agents are dirty rotten scoundrels trying to get out of honoring insurance when we trained the consumer (our clients) to base their decision on price alone.
Consider this, you are going to need heart surgery and you need a surgeon. Do you shop for the best price or for the best surgeon? You are in a legal fight that could cost you most of your family assets, do you shop for the best price or the best attorney you can afford? Think how important insurance is to the average person. It provides protection for their vehicles and for their home and personal belongings. It may even provide protection for their very lives and health. In the event of a catastrophe insurance has the ability to restore that person, family and their belongings as if it never happened. Literally, that family’s future and the assets of future generations of that family depend on the type of coverage that they have. I can promise you after many years of handling claims that not one of my clients in a serious accident or loss was worried at the time about how much they paid. So, I will continue to make certain that the insurance coverage is the first and most important topic that I have with my clients and then after we agree on proper coverage shop the market place for the best price. All insurance is not the same and price is only part of the conversation.
Choose your insurance first. Ask the hard questions and challenge preconceived beliefs about insurance to make sure you have the most comprehensive coverage. Make sure that the insurance company or your insurance agent understands what you expect in the event of a claim and settle on your insurance coverage plan first. Only after you have an insurance plan that works for you should you shop the markets for the best price. And keep in mind that your coverage plan changes as you go through life. Take the time to discuss your insurance plan with your agent each year. Be clear that you want your coverage plan to be competitive and you expect your insurance company or your agent to verify that it is. If they are unable or unwilling to do so that is when you should look for another company and/or another agent.