Get the most from your insurance
Insurance is a paradox — it's something you are glad to have but never really want to use. This means you are paying monthly or annual premiums for a product that you will only fully appreciate after experiencing a traumatic or unpleasant incident. So how do you make sure you are getting the most from your insurance policies? I asked Terri Wright, an agent with State Farm Insurance in Yarmouth, for some tips.
- Review your policies on a regular basis to see if you need any additional coverage. This review can also help determine if any discounts can be applied to your current policies or if you no longer need a certain type of coverage. It might cost more if you need additional coverage, but having what you need is as important as getting the discounts you deserve.
This is the time to let your insurance agent know how your business works so they can spot any potential risks. I know of one business that forgot to tell their agent about an off-site location they only used a few times a year. When an accident took place at that location, the event wasn't covered. This ended up costing the business a large sum of money, especially when the client insisted on full repayment for the damaged property.
- Although it takes a lot of work, going out to bid on your insurance policies every two or three years is another potential way to keep your insurance costs down. As you price shop, however, be aware of the discounts you receive from many carriers for being a longtime customer of your current agency. According to Wright, one of the contributing factors of your insurance premium is how long you have been with your existing carrier. Even though price shopping your current policies may result in immediate savings, your insurance premiums will increase if you change carriers on a regular basis. Make sure you compare these immediate savings with the potential 20% – 25% discount you could get with your current carrier as a benefit for being with them over a long period of time.
- You are probably familiar with the multi-line discounts you get for insuring your house and cars with the same insurance agent. Don't expect to see this type of multi-line discounting with your business policies. Wright says that few, if any, discounts are available for bundling business insurances together.
Given that, why should you keep all of your insurance policies with the same agent? One good reason: liability exposure is your biggest concern and the best way to address this is to keep all of your policies with one agent. In a time of crisis, you don't want to be stuck between two different companies arguing about who will cover the liability issues. Sticking with one agency makes it easier to coordinate the myriad of details and payments that will naturally occur after you start using your policy benefits.
Throughout all of this, a good, honest, and trusting relationship with your agent is needed. Make sure they know how you operate your business. The spectrum of your business can change — including what you do — so be sure they know the scope of your operations, the number of people you employ and the value of your inventory, especially since these numbers can change on an annual basis. Make sure your agent has enough information so you both feel comfortable that you are properly covered. The goal should be “no surprises” for either you or your agent, especially if you do end up needing to use your insurance policy.
Consultant Alison Hinson, owner of Alison Hinson MBA LLC, can be reached at ahinson@midmaine.com
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