Too many times, when shopping for their insurance program, business owners use 4 to 5 different agencies to get quotes. The perception is that the more agencies, the more chances to receive a better quote. The problem with that strategy is the business owner rarely vets the insurance agent that is promising the best carrier, the best price, and everything else under the sun. The fact is that right insurance agency is more important to a business owner that the perceived “right” insurance carrier. Several years and several horror stories have reaffirmed this fact over and over again.
One story in particular, occurred just recently when I met with the owner of a large trucking firm. The owner of the business was seeking to change insurance agencies. He had just recently learned that his former agency had been collecting his premiums, but was not paying the insurance company. As a result, his policy was cancelled for ‘Non-Pay’ and his insurance carrier refused to reinstate his policy. Needless to say, he sued the insurance agency (a strenuous process that, weeks later, remains unresolved) and was forced to shut down for five days while he searched for a new insurance agency.
When we met I asked him how many insurance agents he had already met with before me. He told me four. My initial reaction was to thank him for his time and wish him luck. But instead, I asked him why he was working with so many different agents. His answer: “I want as many quotes as possible. It was a predictable, but frustrating answer.
I took a moment to explain to the business owner that there are only a limited number of insurance carriers willing to insure his particular class of business and that the first two agencies he met with more than likely had already locked up those markets. I then asked him if he had a prior relationship with the agencies or if he was referred to them by a trusted source. His answer was no. Because of the mess he had already gone through, I was baffled. It was a classic example of a business owner focusing solely on the numbers and not doing their due diligence by thoroughly vetting each agency. I told him that it would be to his great advantage if he interviewed 3-4 agencies and had them present their qualifications and experience, including providing a list of all the insurance carriers they represent. Then he could cut the list down to the two agencies he was most impressed with and have them list the carriers they think would be best for his business before assigning the markets to the agencies.
The business owner agreed and he decided to start the process over. After hearing all the presentations, he slimed down his list to just Connor & Gallagher OneSource and one other agency. In the end, he found that Connor & Gallagher OneSource was the best fit for him and his business. We offered him a competitive carrier with excellent service and we haven’t let him down. For his part, the business owner is glad that he took my advice and adjusted his strategy to make the best decision for his business.
For some reason many business owners continue to think of an insurance agency as a commodity. The truth is they should think of their agent in the same light as their lawyer or accountant. A mistake by an agent can cause drastic consequences to a business in the same way a shoddy lawyer or a dishonest accountant can. It’s important to vet each insurance agent efficiently, and take control of the quoting process, otherwise you may end up with a subpar agent locking up a good market that a better agency would have represented.