Category Archives: price

06.29.15
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Dear Insurance agent losing business to me;

I hope this finds you doing well.  It’s been a bit and I know things can be tough for some of us.  Safe to say it could be more challenging now than when you started in the business.   Honestly, if there was an insurance police this would be something they would want to know about, but since there is not I’ll just write this note to you.

For a while, I honestly thought it was mostly the on-line quoting machines that were making such a simple mistake.  Than I started to see more and more captives acting this way.  Yes, indpendents are not completely innocent but  I don’t take as much business from independents.  I’ve always wondered if it was 1) a mistake 2) a lack of knowledge or worse 3) a mandate from the company they work for.  In the case of the local captive agent, I am guessing it is more of a product of desperation. Really needing every phone call to result in business so you cut corners.  You cut corners you wouldn’t cut for your family but would do it in the name of  “low rates” or worse binding a policy today for a commission or some sort of contest.

Here’s the thing, by short changing your customer, you are actually short changing yourself.  In the short term you are costing yourself commission and potentially your customer some much needed coverage.

WHY?

Honestly, I have no idea.

Now take this from the sales side.  If your fellow agents are doing things one way, why would you want to go down to their level?  You wouldn’t!!!!  So please stop doing it.

How do you fix this?  Simple.  When you are quoting auto insurance, whenever possible you provide the same amount of supplemental un and underinsured motorist coverage as the liability coverage you are providing.  Really not hard.  If you are quoting $500,000 in liability, you quote $500,000 in un/underinsured motorist.  SIMPLE, now just do it.  EVERY TIME.

  • it’s the right thing to do for your customer
  • it’s the right thing to do for your family
  • it’s the right thing to do for your top line
  • it’s the right thing to do for your bottom line
  • it’s the right thing to do for society
  • you’ll close more deals because you’ll stand out
  • you’ll make the industry better

Seriously, if you need more reasons it might be time for another business.  Anyhow, happy selling.

 

Sincerely,

 

The agent taking your business

05.21.15
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When your “competition” helps you

So I was playing around with on-line quoting and of course had to use Geico.  Recently, now about 3 months late I received a well done email.  Obviously now part of a drip campaign.  This is not remarkable but what was there certainly is.

Coverage Coach

FANTASTIC.  First of all it is a very cool tool.  Clean screens, easy to use, etc.  But why is this important?

BECAUSE THE COVERAGE THEY OFFER IS NOT AS GOOD AS WHAT YOU DO!

That’s right.  I went through it ten times with a variety of combinations and every time I came up with less coverage than what I would offer a similar person.  Baffled by this but not surprised.  I’ve been replacing Geico policies for years.  When not replacing them I am encouraging(sometimes begging) people to please take higher coverage.  Most of the time it works.  Let me speculate on why;

  • They think they are saving you money?  In theory they might be.  In reality, 9 out of 10 times they aren’t.  Really.  If you could save $50 a year or have $400,000 which would you choose?
  • “But you don’t need that much coverage…”  Prove it.  While you are at it go to the store and by me a lotto ticket.  Same scenario.  Also, if you have not noticed, companies partially base your rates on previous liability limits.  Lower limits typically leads to higher rates.  Your call.
  • $250 deductible?  $500 deductible?  No coverage on a $5000 vehicle?  Baffled.  When it comes to your comprehensive and collision coverage(also known as physical damage) consider a few things.

1. If your car is safe to drive and presentable would you get that small dent fixed?

2. Ask a body shop how much work $500 actually is?  Also ask about $1000.  Oh, by the way, the odds of your rate going up for a claim less than a $1000 are as good as over $1000.  Basically whatever you collect for the claim you’ll likely pay back over the next 3-5 years.

3. What your car is worth and what it is worth to you may be two different things?  Math doesn’t lie.

Just some quick thoughts.  Unfortunately the philosophy behind Gecio may be getting more of a life with some of the new “quoting” companies.

Just some thoughts.  Use if you want.

 

05.14.15
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Dear State Farm,

One thing that seems to continually bother me is when the wealthiest people and companies choose not to really do the world some good.  When they choose profits over people.  When they are genuinely in a position to change an industry for the better which will increase their profits and genuinely help the American public and they choose not to.  Baffled by it.

Why write today?

  • Because every time I receive another letter from you I wonder why another tree branch had to die.
  • Because I wonder why a huge company allows their product to be so diluted by advertising.
  • Because I wonder about the last time you or I calculated any savings in percentages.
  • Because I am wondering if there is anyone who can accurately calculate a discount on an insurance policy.
  • Because I am wondering why, in the age of specialization, personalization and niches you still send to “or Current Resident”
  • Because I am wondering why, if you are really a good neighbor, you don’t use local printers and mailing operations.
  • Because I am wondering why you are still using white envelopes when there is science behind using colored envelopes.
  • Because I am wondering why you use a standard #10 envelope when you can mail one twice the size for the same cost.

Oh, and your copy stinks.  Seriously, do any of your agents have enough time to “take a long, hard look at all the possible ways you can save….” Really, if you are still combing through policies you have bigger issues.

But then again you are the largest insurer in the U.S.A.  You also have fifteen agents within about ten miles of my home.  **That is scary**  What do I know.  Either way, thanks for reading.

Sincerely,

 

Billy Van Jura

 

Disclaimer; There is good and bad in everything and advertising/marketing is no exception.  We are reminded of this every time we open our inbox, our mailbox, drive around, listen to the radio, watch T.V. etc.  I suppose the other side of this is that the lazy, spam like advertising perpetrated by many companies actually makes average advertising look good and good look great.

01.22.15
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Let’s go shopping

So it is time to take my own advice again.  With renewals for auto and home insurance pending I decided to do some shopping.  I’ve definitely written about what to do when your rate goes up but this time I did things  a little different.

START; Unfortunately my home is basically unmovable, two claims in less than five years.  So I look at what the rate will be without a multi-policy discount.  But wait, it gets a little worse.  I had a stretch in 2012 and early 2013 with three tickets.  Not good.  But, on a plus side, my wife’s two claims are now over five years old so they fall off.

  • no your record.  no that all claims/tickets are not being treated equally
  • time on a record will vary as well
  • make sure you are not being charged inadvertently.

Now that I know my record and know my real home rate lets go shopping.  So I am trying to avoid the “lead” companies so chose; State Farm, Liberty Mutual, Nationwide, Comparenow, The Zebra, Coverhound, Geico and Esurance.  Remember; there is always a better rate available but your time is likely worth more than what savings you’ll find.  Best to limit your search. So I learned a whole lot.

  1. The future is on-line, yes you already know that, but in insurance we are still in the early phases.  Lots of room for improvement.
  2. Expect to give some basic personal data.  Your date of birth and address as well as those from other drivers
  3. Don’t be uncomfortable; if your vehicle information, prior insurance information and driving history comes back automatically it is ok.  Saves you time.
  4. Might as well disclose your tickets and accidents.  Saves you time
  5. PLEASE PLEASE PLEASE read the fine print.  There was lots of it.
  6. READ CLOSELY, there were lots of not so good things with the coverage sections.  I find many to be unethical and quite shameful but then again I’m human
  7. Some of these sites really need to work on their writing.  Lots of inaccuracies and false statements.
  8. Pay attention to ESTIMATES everyone had a disclosure about when a rate was accurate.  Some only provide estimates then sell your data to the companies
  9. You would not want your family to be hit by a car with what most of these options consider great coverage
  10. Computers are not human and this exercise further confirmed that the programmers behind the sites could use some education

My observations are a bit different than most since I am in this business.  I also have a lot more observations about how inefficient these sites actually are.  But where would I start?  Anything(just about) that saves me time is a good thing.  Copywriting/Content writers whatever they are called are pretty important, they should really sit down with the attorneys and think things through.  Could easily list 3-5 errors on each site.

Final thought; Geico and Esurance provided a pretty impressive “experience” despite their awful recommendations.  Like the rest of your life, it is buyer beware.  Computers can replace humans for many basic transactions but I have yet to find a site close to me or many of my counterparts.

09.07.14
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So I cracked my Windshield, now what?

Well Glass coverage, as it is commonly called, comes with your comprehensive coverage.  Pretty common here in New York and to be honest, I have no idea why you would want to have comprehensive coverage and not glass coverage.  Really, it comes down to a math equation.  Average new windshield cost is $200+ mine just cost my insurance company $341.22.  My comprehensive coverage is about $100 a year.  Not a bad gig for me nor is it a bad idea for most people.  Honestly could be the best value in all of insurance, also the most used.  Goes right there with your Towing and Labor coverage.

So about my experience.  Well the call in was as to be expected.  You call in to a call center on a Saturday morning and you get what you get.  So on Tuesday morning, since the shop is down the street from me I stopped in.  Pretty interesting to see how many windshields just one shop is prepared to fix in a day.  Now I would be the next morning so I made my arrangements and moved on.  Drop off went smooth then got bumpy but hey at 9:30 my car was ready as planned.  Bottom line, it was a basic solid experience.  Not much to talk about.

  • Nice that they vacumed out the car
  • Nice that they left some sort of Febreeze air freshner
  • Nice that it was basically “sign and drive”

Beyond that I was left wondering if I have any other options?  I know you are allowed to go wherever you want but to be honest do not eve know of anyone who can be close to as convenient.  Should there be?  yes, my guess there is a huge opportunity here, especially with some clever marketing.

For another time; should glass coverage be so inexpensive?

Should it just be included in comprehensive and not even an option?

Just some thoughts.

 

07.08.14
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What price do you really pay for your auto and home insurance?

With several hundred companies offering auto and home insurance in the U.S. you would think a bit more variety would exist.  The reality is that the majority of them are after the same demographic; good to great credit, home ownership, college educated, multiple cars. Then there is everybody else.  With a constant turn over of actuaries and heads of underwriting everybody else inevitably can get luck and fit into a preferred companies model.  Generally due to a fluke in the sophistication of underwriting.  But the reality is still that there are only three prices available to the public and YOU choose your price.

1. Best(see lowest)Price; reality is this is all on you to get the lowest.  If you really wanted this you would have to spend several hours on the phone and computer.  I am not aware of ANY agent who has access to every company and as of this post there is not an website with all of them either.** It’s coming**  So now what?  Be sure to decide on your coverage before shopping.  Also realize that you may have never heard of the company you end up with.  Also realize that the spread from the lowest to the highest rate may be 100% different but it is likely 1-5% in the lowest five options.  Was it worth the time?

2. Fair Market Price; this is what most people have.  Your rate is likely in the top 5-10 available rates and is solid.  Sure you can save a little bit but is it worth the time?  Is it worth any technology sacrifices?  Is it worth losing an agent(friend you buy insurance from)  To you it probably is not.  This is ok.  Honestly I think this is where you want to be.  Remember saving more than $300 or so between your auto and home is not a good thing.

3. Loyal Price:  Here is your warning.  If you are with an agent who only has one company in all likelihood  this is what you have.  Take comfort in the fact that your agent is doing the best he/she can with what they have.  In my experience(11 years worth) for most of your time with this company you will be closer to the top end of fair market than at the lowest.  But hey, you are supporting a person you like, I hope, and hopefully they bring more  to the table than just insurance.  Maybe some business acumen, maybe some friendship, maybe referrals, etc.

What do all three have in common? You choose which one you have.

Thanks, just some thoughts.

04.11.14
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But does the band aid fit?

So the other morning I was shaving and cut my chin a bit.  Somehow these tiny cuts bleed profusely and with about an hour before I had to leave I had to do something.  So I apply some cream so it will clot a bit and then apply the first band aid I could find.  It was clear and way bigger than what I needed but it worked.  It had the little bit of gauze that all band aids have and after a short time the bleeding stopped.  Now our upstairs cabinet was not quite like this;

But we did have five different kinds available.

Now as I was leaving I removed the band aid and confirmed this bleeding was done but what if it started again?  So now I went into our kitchen cabinet and grabbed a band aid.  So the downstairs cabinet is more for those times when the kids get cuts outside so it looked a bit more like this;

I went with the penguins from Madagascar.  Not because of the penguins but because it was a much smaller band aid.  Still had the same interior gauze but smaller.  It would work and fit my chin better but it did have a penguin on it and I was going to present at a meeting.  Not exactly ideal.

The point is this, there are several hundred companies that offer insurance.  Reality is the most important coverages (the gauze) that are offered are the same.  Now is your company the right size for you or the right color or have the right other features that is the true question.  And don’t worry, although changing companies takes a little longer than removing a band aid it is less painful.

Just some thoughts.

12.28.13
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It is what it is they are what they are….

An awesome advertising company that happens to sell insurance.  Every week of the year your mailbox is likely infiltrated by a mailing from Geico.  Not always a letter, sometimes just an insert in something else but they are there.  The message is always the same ” How much could you save on your car insurance?”  They use that goofy gecko, a pig, a caveman, random “b list” celebrities, etc in order to try and get your attention in a crowded place and they do a really good job at it.  This is based on them recently being ranked the #2 car insurer in the United States.

So good for them!  They actually make it easier for me to stand out with a commoditized product.  The thing is they completely dumb down what is more often than not an important piece of a financial plan.  Let’s look at this weeks mail; 5 Important tips to help you save money on car insurance

1. Insure more than one car on  your policy;  Is that the best you can do for number 1?  Really, insure another car?  In many cases it is actually considered fraud to not disclose other vehicles in a household NEXT

2.Make sure your car is equipped with safety features:  Come on man(thanks CC)  you then point out Anti-lock brakes, air bags and anti theft systems.  2 of those three are basically standard features of any car 2000 and newer.  As far as anti-theft, the discount is so small since it is a percentage of comprehensive which is your least expensive coverage.

3. Find out if your alumni association, credit union or professional group partners with Geico.   Ok now you are offering something, nice play.  Enjoyed this for years at Liberty Mutual until I realized it was more of a marketing ploy than an actual discount.

4.Insure more than your car with Geico.  Great a multi-policy discount, how original.

5. Educate your young drivers, or encourage them to get their own policy.  Although I like this idea from an overall responsibility perspective there is a small chance of savings.  See do you think the 18-22ish year old can afford the rate?  If the parents still need to subsidize the cost where is the savings?  

My key take away on this and anything else Geico presents is this; They do what they say they are going to do.  They do not promise a solid policy, they do not promise great coverage they do not promise that this policy is a great piece of your financial plan.

Good for them, but most people want better value not better price.

Just some thoughts.

12.06.13
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Math and value and flood insurance

Woke up early and was immediately thinking about one of my last conversations yesterday.  Let’s start with some math;

If you spend $1000 and in return I lower the cost of something by about $3000 what could you consider your return on investment(roi)?  $2000 not bad.  Not bad at all.

So in the first year of this new product you saved $2000 by spending $1000.  Now in the second year(assuming current numbers stay the same) you actually save $3000 since you do not spend the $1000 again.  So you have now made $5000 by investing $1000.  500% return.

Now let’s say you need to keep that product for 10 years so $2000 the first year plus $3000 *12 = $36,000 for a total of $38,000 . **Average time in a home is 13 years** All because you invested $1000.

DISCLAIMER; This is math based on the current situation in flood insurance.  Where a provisional rate is approximately $6000 but if  you invest $1000 there is a very good chance you will see that reduced by about $3000.  With this being a brand new situation(roughly 4 months old) it is to early to make these figures more accurate.

**Real Estate version;

Is not spending $1000 worth losing a buyer?

Is not spending $1000 worth delaying a sale…and possibly losing the buyer?

Is not spending $1000 today worth saving maybe $38,000?

This is no different than upgrading your bathroom, lighting, landscape, paint, etc.

So at the present time here is my explanation as to why I will not guarantee the above; http://www.youtube.com/watch?v=9MGTq0QHWCQ

Let’s look at it another way; DEDUCTIBLE math

So you are getting $250,000 in coverage and want the same $1000 deductible as your home.  Your rate is $6370 BUT factor in you think FEMA is nuts (they are) and you firmly believe there will be NO FLOOD at your home.  So you take a $5000 deductible.  New rate of  $4988 savings of $1382.  The math looks weird, you take on $4000 more in risk but this year you save $1382 plus year two $1382 plus year three and what do you know you are now in the clear (assuming you saved this savings)  risk averted.

Remember insurance is an exchange of risk.  Flood rates are nuts because people were not paying enough into the big pool of insurance.  The only act of government that I believe will fix this is when the government GETS OUT OF THE FLOOD INSURANCE BUSINESS.

When deciding on how to spend your insurance budget don’t just settle for what the crowd says is right.  Your willingness to take on more risk is rewarded with a savings which you should value.  Especially if you place no value on the flood insurance you have to buy.

Just some thoughts.  Please open your mind to some new ideas.

 

07.29.13
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Who uses the phone book?

So like a lot of people, a phone book shows up in a plastic bag in my driveway.  Seems like it happens a couple of times each year.  For whatever reason this weekend I decided to open the bag.  Yes, it is smaller than I remembered.  It is also apparently very eco-friendly addition produced by Hibu .

Now, I am sure somebody keeps them and uses it a few times a year.  My household does not, fortunately today is garbage day so it is now in the recycle bin.  I did learn about www.yellowpagesoptout.com and have now opted out of the three available books.  Now what?

Do you have Google?  Then why would you need a phone book.  I feel kind of the same way about Angies List .  I firmly believe it is great to get recommendations but I prefer to get them from friends not strangers.  Again, I can see why some people need this sort of service.  Sort of a shame though, relying on an online forum rather than human beings you know.  So like all things I take a look at the insurance side of things.

In the yellow pages there are 200+ insurance companies listed.  Some are agents who take on numerous listings.  Others are names I recognized that are no longer in business.  I suppose I hope that they are not paying for these listings but some have full blow ads.   This is sad to me but hey; do whatever works for you.  I do wish I new who called them because of these ads, that would be much more interesting than the ad itself.

Bottom line, my phone book is my phone.  If there is not a number in my personal listings then I search via Google or even Facebook.  How about you?

 

Either way, just a thought.