Why Shopping Multiple Commercial Insurance Brokers Isn’t The Best Solution To Combat Rising Insurance Costs
Here’s a shopping tip that may seem counter-intuitive; sometimes engaging multiple brokers at one time isn’t the most effective way to save money. Less is definitely more when it comes to obtaining accurate quotes for commercial insurance.
You may think asking different insurance brokers for different quotes will lead to a competitive-bidding war. You’ll get the best policy for the cheapest price and come out a winner. While this is possible, it is much more likely that you’ll create an environment full of frustration that includes waiting till the last minute to provide numbers, misrepresented figures, and an outcome that leaves you grasping for what “appears” to make sense.
Trust Your Broker
A good insurance broker that specializes in a given niche should know which carriers can provide you with competitive bids. The process of obtaining the best insurance policy is fairly complicated. There are many factors that the broker and insurance companies will take into consideration when formulating the cost to insure your company including historical data surrounding claims you have had, how your company mitigates risk and the ability for the broker to showcase your company in the most positive light to the carrier. Trying to do this with multiple brokers effectively simply isn’t possible. One of the first questions a carrier will ask is, “is this account controlled by you (the broker)?”. If it is a yes, then that carrier knows they have a higher likelihood of writing the business. If it isn’t, they may not be interested in investing the time it takes to create an accurate estimate for insurance your business or employees.
So how do you choose a good broker?
The answer is a defined process. If your broker doesn’t have an answer to the question of how they’ll address the risk factors that insurance carriers look at when rating up insurance, then it’s probably time to request an in-person meeting. You need to understand exactly what your broker is doing to manage your insurance cost. Things such as an Experience Modification Rate, managed claims, and utilization of risk management services are all items that should be discussed regularly between you and your broker.
If you have concerns about your current insurance cost or are unsatisfied with your current broker, we’d be happy to discuss our process with you and see if we can’t be of service to your company.