Q: How often should I “shop” my business insurance and how should I go about it?
It’s important from time to time to look at other property and casualty insurance options for your business. How often you do it and the process you use are crucial. Knowing not to shop your insurance each year is a great starting point.
Insurance underwriters decide whether to provide insurance and what to charge for the coverage your broker proposes. They keep track of how often they quote your business and will often turn down the opportunity if they see your business every year; every three to five years is often enough.
As far as how the process should go, first you need to decide whether you want to look at additional insurance carriers, additional brokers, or both. If you’re very happy with your insurance broker, have them look at two to three other carriers on your behalf. They will know which carriers want to target your business.
If you’re extremely satisfied with your carrier, you can call one to two other reputable insurance brokerages and have them do a services proposal. Don’t be afraid to ask how much your broker gets paid. The commissions they earn are usually built into the premiums you pay. Make sure the services you receive equate to what your broker is getting paid.
If you want to look at new carrier and agency options, invite no more than two other agents and have them bring no more than three carriers to the table. Underwriters want to know that they have a good shot at earning your business. This will also limit the time you need to spend in the process since many carriers may want to do a pre-quote loss control inspection.
Start the process around 90 days before your policy renewal date. If you’re looking at new brokers, make sure you get a five-year claims history from your current broker. Also, give competing agents an option to look at your current policies. Good insurance brokers do not want to propose an insurance program based on someone else’s work. They want to do their own policy audit so that they can bring improvements to the table at proposal time. Let them know the expiring premiums, too. Insurance brokers want to give carriers target premiums ahead of time so your time is not wasted. Besides, your current broker has this information and is sharing it with the carriers they are bringing to the table. Finally, make sure your broker proposal meeting is scheduled at least two weeks before your policies renew. That will give you ample time to make your decision without being rushed. Good luck!