You Get What You Pay For

We purchased our house last summer, and along with it, I “voluntarily” signed up for a long list of projects.  Some I knew about, many of them apparently were put in the very fine print of our marriage contract.  Being a handy guy I figured I could knock ‘em down one by one before the end of the year.  To add to the fun, we also had our first homeowners claim when our toilet overflowed for the better part of an hour.  Props to Heather for knowing where to find the shutoff valve.

After our place dried out, my “to do” list got a lot longer.  I figured could save $100 and put in a new toilet by myself.  With no prior experience, a little help from YouTube and Terry’s Hardware, I went to work and was feeling pretty good about myself.  Three days later, the floor around the toilet was like a wet sponge.  I knew it was time to call the experts before I’d catch more hell for my mistake.

I may have saved $100 up front on plumbing, but it wound up costing a lot more money and time in the long run.  The same thing can be true with insurance.  Everyone feels good about saving a few bucks, especially from the “evil” insurance carriers.  In fact many carriers themselves have managed to commoditize the industry by blasting you with ads about how cheap their insurance is.  I think a lot of people assume it's as complicated as picking up milk from the grocery store - do I want name brand, store brand, or the organic thing.  At the end of the day they're all the same - white, delicious, and liquid.  Back to insurance - as long as you don’t have a claim, everyone is happy – you, the insurance company, and your agent.  The problem is that once you do have an issue, that cheap quote could end up costing you a lot more in the end. 

Maybe it was cheap because 1) your claims adjuster is MIA when you need him; 2) your policy didn’t cover what you expected it to, and you’re left holding the bag; 3) your agent left out some important parts of the policy or it is not programmed correctly (get ready for a not-so-fun surprise year-end audit); or maybe 4) the carrier is buying market share and doesn’t understand your business.  If the carrier is buying market share, see #2.  And again if #4 is true, prepare for a bait and switch or the carrier leaving the market altogether in a few years because they’ve underpriced the market.  And then you’re back to square one again. 

Cheaper isn’t always better.  Saving a few bucks up front could wind up costing you way more than you had bargained for.  Whether it’s unexpected self-insured losses, wasted time, shopping for insurance every year, or dealing with other headaches, at the end of the day it doesn’t end up being a better deal.  I learned my lesson with plumbing the hard way.  Hopefully you won’t have to with your insurance. 

And for those of you wondering, I couldn’t have been happier with how our homeowners claim was handled.  Thank you West Bend Mutual for doing an awesome job!

 Next up… picking a broker.  If you have any topics you’d like me to cover, I’m always open to suggestions.  Stay tuned!

Andy Bertram CPCU, ARM-E
Risk Advisor
620 Main St
Red Wing, MN 55066
Phone: 651-800-6173
Fax: 651-388-8443

www.cobrown.com

Not Just for Old Men With Gray Hair

Let me at first be clear: I have never written a blog, so when I started this blog I wasn't exactly sure where to start.  I'm a younger (not new) insurance professional, but when you compare me to the rest of our industry, I may as well have just come home from the hospital with blue socks.  I'm half the age of a typical insurance broker, underwriter, claims adjuster, you name it.  At 28 years old, I'm 7 years in with life to go.  That would sound like a bad prison sentence to most folks, so it's a good thing I love what I do. 

Our industry is filled with folks well on their way to the golden years.  Most people in our generation's eyes glass over when you bring up insurance, including my own at a boring seminar topic that I've heard a million times.  It's sort of like those Geico commercials when I'm at some of these seminars hearing the same thing.  I feel as if I'm in another episode of Groundhogs Day every time I hear those commercials  We get it, you can turn around a fast quote.  It's not always the cheapest but it's fast.  Thank you for making insurance a commodity where everyone expects that cheaper and faster is better.  That was sarcastic in case you didn't catch that.

Going back to my original point now.  My generation is at the point where they are starting to take over mom and dad's business, venture out on their own, or buy an existing company.  Usually they don't know a thing or care a whole lot about risk management or insurance because let's face it, our industry is good at putting people to sleep.  As they ask for references from people they know, the business's current broker, agents that walk through their front door, you name it, these new millennial business owners realize that their insurance guy just bought his first computer five years ago.  To some of these gray haired folks, Facebook is as risky endeavor where people are going to try and steal all their personal information to be used against them.  A Tweet may be something they heard in a city park one time from the birds.  And a blog?  What's a blog?

So all you Millennials and anyone else for that matter, here's your big chance.  If you have any insurance or risk management related questions, please send them my way.  I'm writing this to keep you informed on what really matters in the world of insurance and risk management here in the 21st century, not just what you see on TV.  I am going to make a point of posting a new blog at least twice a week, and if the weather is really awful outside, more.  Seeing as I live in Minnesota, there's a very good chance that will happen.

Look for my next post later this week: "You Get What You Pay For."

Andy Bertram