Commoditization of insurance is a good thing if;

As an agent you: 1. Have a lean business with good profitability.  This puts you in a better position to handle market or government based price changes. 2. Understand customers pay you not companies.  Your customers write the check then the company writes a check to you.  Without their money the companies do not get money and you do not get money.  Who is the most important in this equation? 3.  Have a strong “win win” relationship with your customers.  This will give you the benefit of the doubt in certain situations and will create a longer relationship.  Longer relationship will typically be more profitable.  If your customer is loyal and believes they are more of a partner in your business who cares if it is a commodity you aren’t!

As a company you: 1. Have a consistent underwriting philosophy and do not try and play a hot piece of the market for a few years just to grow.  Get good at what you know and make each dollar as profitable as possible.  2. Value your customers.  If you have whatever you consider a good risk KEEP IT do not let it go make an effort to make them feel appreciated.  3. Created Loyalty.  Give them a reason to trust/love/pay you don’t just say they do.  Give unexpectedly, don’t squander unitended loyalty of a long term good paying claims free customer.

As a purchaser you: 1. Make an effort to review your insurance every 12-18 months.  Give your agent first try and if not happy find someone else there are plenty of us.  2. Don’t listen to your neighbor/friend/family member about what they heard ask a professional. 3. It is not necessarily a good thing to save $500 on your insurance.  $200 is a market swing, no big deal.  $500 with no dramatic changes(tickets/accidents falling off, removing coverages, taking a driving course) is not a great thing.  Enjoy the money but hope for the next year or twenty that the rate stays the same or goes down slightly.

My opinion of course…


The math of lower rates:

The reality is that most families have a choice of at least 10 if not 20 insurance companies that are willing to provide the insurance for their vehicles and home.  So let’s assume you come up with 15.  At least 80% of people will qualify for a rate with all companies, this may not  be a rate you like so let’s say 8 of them are higher than where you are now.  That leaves 7 companies with a rate comparable to yours, maybe a little higher maybe the same maybe lower.  Now what?

Now you find a professional agent to help you sort through them.  Factually they should know most nuances in regards to billing and additional coverage that may best fit your situation.

But I already have an agent and my rate still seems to go up.  You are also probably told it is inflation or “just how it is…”  or “everybody is raising rates” or one of my favorites ” rates are just higher in (insert your state here)…”  Well I have no idea who everybody is because everybody is not raising rates every year, the inflation excuse is mostly non sense especially if you have an older car and it is by no means just how it is.

Have some fun with your agent, spend 10 minutes looking at the companies listed on their website.  Then ask to see the quotes from all of these companies.  If you want to push it further ask them if they have relationships that allow them to access more companies.  Of course the company you choose to insure with is a mutual decision between you and your agent.  If changing companies and not entirely sure use the power of Google and research the company a bit.  5 minutes on their home page, 5 minutes on their Twitter feed and maybe 10 more at your state department of insurance web site should be more than enough to form an opinion.

Thanks for listening let all the insurance marketing you see make you more aware not just a price shopper.