Let’s see – Google cars, email, maps, phones, eyewear, insurance, and data. If they’ll develop clothing and food then I’ll be all set. Or maybe I won’t need clothing or food if Google doesn’t let me into the sealed Google dome.
It is always interesting how companies that know little or nothing about insurance think they have all the answers. Progressive still gets 65% of it new policies from agents. Yep maybe someday we can all trust the internet to deliver “EVERYTHING”. Geico, is the largest direct writer in the US, and is also the largest advertiser. So instead of paying agents sell and service their policies the spend it on advertising. Yep real savings. PS they underwrite thier policies after issue…..
Wake up Don! I can tell you that you’re incorrect. I’m a current independent agent that worked for Geico during the internet’s infancy. I fortunate to get exposed and work in several departments. After I graduated from the phones I taugh an insurance operations continuing education class there. One of the things you fail to understand is that they believe “an investment in technology is an investment in the future”.
Currently, 80% of Geico’s policies sold online never cross a human’s desk. The “backside” underwriting you refer to is reserved or kickouts or various reasons including undisclosed drivers, irreconcilable clue/mvr results, etc. — You know, the same ones that slow you down as an agent.
As far as their advertising, you should be very afraid. They understand they lose underwriting dollars in the new business game. However, with greater than 90% retention combined with overall underwriting ratios in the 80s and low 90s, the combination of seasoned and new business means they make an underwriting profit. This means they can keep their prices low. (remember they have a 10-15% head start by removing agent commissions over time).
I give you these very specific details and facts so understand why it is important to NOT underestimate Geico, Google, and any other company that looks to bypass the agent through technology. Technology will continue to minimize the role of the agent, or narrow the agent’s focus. Whether you continue to target the masses or a specific clientele is up to you.
Personally, I see the writing on the wall for the “auto insurance guy”. One day, you will be able to call (insert company name here). Answer questions with the use a voice recognition software and fill out an underwriting application, get a quote & bind without the assistance of a human being.
While Google is the 800 pound Gorilla everyone is talking about now. Carriers will combine technologies like the following: IBM’s Watson, SIRI, Cortana, or Google Now, with services like: Twilio to their phone applications. If and when this happens, say “Bye bye” agents. that is as you know it.
The reality is that we can talk about Google, Geico, or whoever. The independent world is disjointed and segmented. As independent agents, we wait for someone to innovate. Then we sit back for 5-10 years and wonder if it will REALLY work. By then it’s almost (if not already) too late. Unless you have a really big outfit like Marsh or Willis to innovate, we remain at the mercy of big tech, big data, and now big insurance. Insurance agents are JUST NOW realizing that social media, “BLAWGS”, and other toys necessary.
The only hope is that EZlynx comes up with a way to combine speech recognition into the rating engine. So, wake up and embrace the future. With Google getting into auto insurance, the future is here.
David,
What you say is true. And that makes it very sad. Insurance is becoming a commodity. That is going to be bad for people over time. While it is true that most people will be OK with the basic off the shelf policy, most people will not know enough to realize what is and is not the best options(s) for them. It will evolve to “only the rich have good insurance” because only they will have insurance advisers.
I doubt very seriously that any of the call center personnel have any true expertise. It is not cost effective in that model.
The slow death of the insurance agent is in motion. Any agent that refutes this is an agent that needs to convince themselves of their relevance. Since most agents suck off of their residuals and never really provide much service to their clients they aren’t needed anymore. The 10% of agents that do service their policyholders will have a job in 10 years……they just wont be making the money they built their lifestyle around. Google knows when you fart. They certainly can build an insurance engine designed to replace agents…
I wonder where our independent agent associations are on this? Back in the 80’s Raymond Burr (aka Perry Mason) flooded the airways with the independent agents message. The campaign was highly effective. Today, we may catch a Trusted Choice ad on TV every so often. An entire generation of insurance consumers are growing up not knowing the independent distribution channel even exists. The direct writers have done an outstanding job of educating these consumers and I suspect Google will do even better. I hope our agent associations recognize this trend and begin to take a leadership roll to counter. Something besides selling banner ads to their members.
Cheer up agents if all these predictions about the demise of the independent agent come true you can always apply for one of those “Navigator” jobs.
I’ve heard that laptops are making a comeback – I get the feeling that all these reports about the death of all the independent agents have been greatly exaggerated. “Punch 9 to read all these remarks again”
what to say. a 25 year industry veteran…yes a huge alternative distribution Channel…One of the biggest one’s we may see. we see a bunch of Geico and progressive policies with low limits – Basically ” selling” insurance is what these venues will do… and capture more market share. yes.. however what we do IS Valuable. provide indications of Coverage and their relative pricing with some meat behind the Product. never doubt that and Push that Value to the forefront. It is What every Business should be providing in America. Value Build that back into the American culture and we all win.
David Berry’s comments are spot on. GEICO can spend more on customer acquisition than they make from underwriting profit in the first 2 years (or more!) which prices independents out of the market. Google will only add fuel to the fire by further commoditizing personal lines insurance. In a commodity market – it’s all about price. And don’t think commercial lines isn’t next! BOP underwriting is already being automated by many companies.
Neil – Raymond Burr is dead. Has been for a long time. The fact is, your agent associations can’t afford to compete head to head on brand with GEICO (or any of the other big brands) unless IAs start working together as a single voice. IA’s make up more than 35,000 small businesses around the country – that’s no small number. Imagine if we got out of our own way? Maybe that whole generation you mention might begin to understand who we are as an entire distribution model, rather than the one-off stale office on main street. As for banner ads, doesn’t it make better sense for IAs to spend their marketing dollars where consumers actually are (online) rather than in the Yellow Pages like we’ve done since the dawn of time? Clearly, whatever we’ve done in the past isn’t working.
Google entering the CA insurance market may have a positive spin. Google has many quality employees that live in our local market area.
The professional independent agents may have less competition from the career agents and less competitive carriers. This may even lead to a sustainable profit for CA carrier survivors!
Google may also help provide more value to the consumer (mitigate the CA DOI interference in the market place). Google may be able to push back and enable portable persistency, rating based on zip code regions, decriminalizing CA DMV for non-driving issues, rational minimum coverage limits, etc.!!
Google may be able to use their influence to supersede the current CA default proposition routine to enable development of the insurance market.
Are huge discounts for self driving vehicles far off? If google controls the insurance flow as well as the technology the conventional carriers should be warned. Guess its not if but when.
How Google would be different from other websites which provide quotes from various insurers?
Why one would go to Google Compare and not to other websites?
It would be interesting to know if Google is just not providing the cheapest insurance available from a partner , it is also using some analytics while displaying results…..any input? What extra comfort it is bringing for customers
Bill Wilson correctly states that insurance is not a commodity, and implies that purchase decisions must reflect the fact that insurance is a risk management tool.
I hope Google Compare will do more than compare premiums…that they will help the “insured” identify exposures and appropriate coverages/limits; and that they will compare coverage and claim service.
HOLD THE PHONE!
Why all of the hoopla and panic about Google selling insurance online? Through Google’s new affiliate, CoverHound, insurers have yet another mobile insurance vehicle to offer their usual QUOTES and RATES on their products and services. But how insurance savvy are the directors and officers of Google or CoverHound?
Secondly, what agents, brokers, and producers should be concerned about is Google’s Search Engine Optimization (SEO) dominance! In 2014, Google had a staggering 65%+ of the market share of ALL online searches with Bing and Yahoo trailing at 19.7% and 8%, respectively. These OLIGOPOLIES control over 93% of the online search market!
So what? Well, Google doesn’t have to sell insurance, since they only need you and others to “GOOGLE IT!” when it comes to ANY matter concerning or buying insurance online. If CoverHound’s ads inundate the first 10 online pages on GOOGLE, Bing, and Yahoo, about any insurance products services, etc., who stands to lose more when customers attention span is less than 4 seconds to find what they are looking for online. Also, who stands to lose more when customers want to cut out the so-called middleman (AGENTS, BROKERS, and PRODUCERS) to deal directly with these online insurers?
But the likes of CoverHound, CompareNow.com, and other typical quote and rating services will never create a total disadvantage with auto drivers in California. In California, drivers can now compare the ACTUAL PHYSICAL auto insurance policy from over 130 insurers online, INCLUDING the comparison of several basic uncommonly known monetary benefits and features from these insurers within two (2) MINUTES or less. No questions to answer or forms to fill out and unlike the CoverHound arrangement with its panel of insurers, this new California service, Insurance Snoopers, Inc. (ISI) IS NOT COMPENSATED BY ANY INSURANCE COMPANY!
Ads from CoverHound-Google, CompareNow.com, Progressive’s Name Your Price Tool, Farmers University, and all others currently do not offer this level of insurance education and information from a claims perspective to existing customers or potential clients! The mobile insurance industry needs disruptive competitors like ISI to battle online direct writers or services like CoverHound-Google, which also protects agents, brokers, and producers from annihilation. ISI wants agents, brokers, and producers to stay the course in convincing folks that they do a better job in getting policyholders to understand any type of insurance, be it auto, motorcycle, boat, homeowner, business, life and/or health!
Auto insurance is a commodity. Understanding how it works is not a unique or valuable skill. I find it amusing that in comments on a story about Google there are people claiming that the grandmaster insurance agent wizards are the only ones who can crack the code of auto insurance coverage. Guess what? There is this site called Google where you can research car insurance and find out which limits are best for you.
Herb, What you say is true and also so far from reality that it is almost scary. I have been an insurance agent since the 1980’s. Coverage is simple but also very complex as the individuals circumstances can alter what is “good coverage” and what is a waste of money or even worse leaving the person exposed to risk. In simple terms insurance is the transfer of specific risk up to a specified amount from the client to the insurance company for a fee. People can easily obtain basic coverage via the internet, but the problem is that they (in most cases) do not know what they are doing and in the event of incident have no one to advise them as to their best course of action. The only true help they can hope for is a good agent. The call center people fro internet or “800” number insurers are for the most part short term people and are usually not versed in the particulars that come from each state governing insurance in the 50 States. Even the company I sell for will give you different responses than I will due to them having to comply with laws that I do not have to and having a different perspective. I feel it is right and proper to use all laws and rules to my clients advantage. So I will often give differing advice to meet the needs of different clients.
So, Yes you can “study up” what you need to know to buy insurance online and still “not know what you’re talking about” SO I advise finding a good agent that you feel comfortable with and at a rate that meets your needs. There is also a large difference in the actual contract from one carrier to another. “Cheap insurance can really mean CHEAP INSURANCE. When you buy online or 800 number you do not have the protection of the agents errors and omission insurance. You are really relying on your understanding alone.
Your statement about E&O is right on. If I make a mistake by not writing the correct coverage for a customer they can file on my E&O policy. If the customer buys via the internet then, any mistake is on them. This may very well be the most valuable aspect of using a professional insurance agent.
Anytime I have a good customer/account I bring it to their attention in our coverage review that they understand the additional protection they receive when going through an agent. By the way, I have one of the best retention rates of any agent in my sales district and the state. My customers understand the value of being with my agency.
March 10, 2015 at 3:53 pm
David Berry says:
Like or Dislike:
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Auto insurance is the burger job of the insurance world.
Wake up Herb! It isn’t just price and coverage limits these days. Carriers are using different policy forms that pay and defend differently. Unless the consumer is an attorney or an insurance agent the Google sites you mention doesn’t do any good. I can figure out how to fix just about anything given enough time and research on Google into the subject but, is it an efficient use of my time and intelligence to do so. NO- I am better off going to a professional if I don’t want to take the chance of misunderstanding what I read on Google and even then, hoping that Google published all of the information and got is accurate. Insurance is NOT a commodity – it is a contract and unfortunately these days it is NOT a standard contract.
The best insurance advisers will walk a prospective customer through an exposure checklist similar to those compiled by IRMI and the Big I Virtual University.
And they will ask current clients to report changes that may require new risk control and risk financing treatment.
When I shopped my personal account last Summer, I gave the insurance professional/adviser a copy of my expiring policy. They quoted what their best carier would charge and the coverages they would offer.
They expected that the lowest premium would win, regardless of how the coverages compared.
Does anyone else find it dubious, that all the carriers say that the low limit, constant rate shoppers with mostly minimum limits, are the most undesirable type of clients, since they do not have longevity and are very unprofitable… yet the carriers that participate in a platform of looking at rate only are going to attract mainly the type of customer that no one wants?
I know it is dubious depending on the carrier. The bigger companies like State Farm, Allstate, Travelers, etc. don’t have a pricing model that can consistently make a profit on what is considered non-standard auto customers unless they also pick up additional lines of business like the homeowners; which is usually a low percentage of the time. But some of the lesser known auto carriers are great at making a profit with those customers through fee revenues. They actually bank on a percentage of customers going through the revolving door since they pay for various policy and ‘payment type’ fees each time they start a new policy. Many of them also bank on a percentage of people buying to just get their id card for buying a car, etc. and then cancelling immediately. They collect a “down payment” from that customer ensuring they make a buck with minimal risk taken on. Most fee driven that I’ve seen are Mercury, the General, Bristol West, Viking. Quickly becoming a bigger market as advertising has pushed people to shop on price versus coverage.
I’m wondering if this will impact independent shops more than captive agents. For example, all of the various travel sites on the internet were supposed to make flying and hotel stays more transparent in pricing; which they did for the most part. Except that companies with a recognized brand figured out they could just not participate in those sites. Most notably Southwest Airlines who only sells through their own site. So they effectively shielded their brand from a distribution hijacking. Bigger captive agent companies could just do the same, but I sell more brands as an independent that are lesser known and feel like this is more of a problem for me than it is for a captive representing a national carrier.
Will, I think for sure it will impact agency shops that are primarily substandard to standard auto. Preferred auto / home agencies, for now, I really don’t know how significant of an impact this will have.
Too bad Google is comparing only prices and not policy forms but, this may soon end in Texas. There is currently a bill in the Texas House of Representatives that will either disallow named driver policies and/or require the agent/carrier have the customer sign a disclosure statement that the policy they are being quoted is a named driver vs permitted driver policy (Family Auto Policy) the insured may currently have with another carrier. Carriers are converting to named driver policies because it reduces their risk and allows them to charge a lower premium such as GEICO or as of 11/5/14 so does Progressive.
I also see that Google will further the progress of turning Auto and Homeowners insurance into a commodity.. I don’t see it as a good thing for the consumer (were is Harvey now). I’m hopeful that the masses will see they still need advice on coverage forms, limits and limitations and contact an agent to do a real job, oh and by the way for the same pricing..
Let’s see – Google cars, email, maps, phones, eyewear, insurance, and data. If they’ll develop clothing and food then I’ll be all set. Or maybe I won’t need clothing or food if Google doesn’t let me into the sealed Google dome.
It is always interesting how companies that know little or nothing about insurance think they have all the answers. Progressive still gets 65% of it new policies from agents. Yep maybe someday we can all trust the internet to deliver “EVERYTHING”. Geico, is the largest direct writer in the US, and is also the largest advertiser. So instead of paying agents sell and service their policies the spend it on advertising. Yep real savings. PS they underwrite thier policies after issue…..
Wake up Don! I can tell you that you’re incorrect. I’m a current independent agent that worked for Geico during the internet’s infancy. I fortunate to get exposed and work in several departments. After I graduated from the phones I taugh an insurance operations continuing education class there. One of the things you fail to understand is that they believe “an investment in technology is an investment in the future”.
Currently, 80% of Geico’s policies sold online never cross a human’s desk. The “backside” underwriting you refer to is reserved or kickouts or various reasons including undisclosed drivers, irreconcilable clue/mvr results, etc. — You know, the same ones that slow you down as an agent.
As far as their advertising, you should be very afraid. They understand they lose underwriting dollars in the new business game. However, with greater than 90% retention combined with overall underwriting ratios in the 80s and low 90s, the combination of seasoned and new business means they make an underwriting profit. This means they can keep their prices low. (remember they have a 10-15% head start by removing agent commissions over time).
I give you these very specific details and facts so understand why it is important to NOT underestimate Geico, Google, and any other company that looks to bypass the agent through technology. Technology will continue to minimize the role of the agent, or narrow the agent’s focus. Whether you continue to target the masses or a specific clientele is up to you.
Personally, I see the writing on the wall for the “auto insurance guy”. One day, you will be able to call (insert company name here). Answer questions with the use a voice recognition software and fill out an underwriting application, get a quote & bind without the assistance of a human being.
While Google is the 800 pound Gorilla everyone is talking about now. Carriers will combine technologies like the following: IBM’s Watson, SIRI, Cortana, or Google Now, with services like: Twilio to their phone applications. If and when this happens, say “Bye bye” agents. that is as you know it.
The reality is that we can talk about Google, Geico, or whoever. The independent world is disjointed and segmented. As independent agents, we wait for someone to innovate. Then we sit back for 5-10 years and wonder if it will REALLY work. By then it’s almost (if not already) too late. Unless you have a really big outfit like Marsh or Willis to innovate, we remain at the mercy of big tech, big data, and now big insurance. Insurance agents are JUST NOW realizing that social media, “BLAWGS”, and other toys necessary.
The only hope is that EZlynx comes up with a way to combine speech recognition into the rating engine. So, wake up and embrace the future. With Google getting into auto insurance, the future is here.
David,
What you say is true. And that makes it very sad. Insurance is becoming a commodity. That is going to be bad for people over time. While it is true that most people will be OK with the basic off the shelf policy, most people will not know enough to realize what is and is not the best options(s) for them. It will evolve to “only the rich have good insurance” because only they will have insurance advisers.
I doubt very seriously that any of the call center personnel have any true expertise. It is not cost effective in that model.
The slow death of the insurance agent is in motion. Any agent that refutes this is an agent that needs to convince themselves of their relevance. Since most agents suck off of their residuals and never really provide much service to their clients they aren’t needed anymore. The 10% of agents that do service their policyholders will have a job in 10 years……they just wont be making the money they built their lifestyle around. Google knows when you fart. They certainly can build an insurance engine designed to replace agents…
I wonder where our independent agent associations are on this? Back in the 80’s Raymond Burr (aka Perry Mason) flooded the airways with the independent agents message. The campaign was highly effective. Today, we may catch a Trusted Choice ad on TV every so often. An entire generation of insurance consumers are growing up not knowing the independent distribution channel even exists. The direct writers have done an outstanding job of educating these consumers and I suspect Google will do even better. I hope our agent associations recognize this trend and begin to take a leadership roll to counter. Something besides selling banner ads to their members.
If one lives long enough, one will see Google owning the air we all breathe and they will charge you by the breath or infuse it with advertising.
Cheer up agents if all these predictions about the demise of the independent agent come true you can always apply for one of those “Navigator” jobs.
I’ve heard that laptops are making a comeback – I get the feeling that all these reports about the death of all the independent agents have been greatly exaggerated. “Punch 9 to read all these remarks again”
Maybe I’m reading the article wrong, but it sounds like Google intends to use agents rather than going direct. “For your customer”?
what to say. a 25 year industry veteran…yes a huge alternative distribution Channel…One of the biggest one’s we may see. we see a bunch of Geico and progressive policies with low limits – Basically ” selling” insurance is what these venues will do… and capture more market share. yes.. however what we do IS Valuable. provide indications of Coverage and their relative pricing with some meat behind the Product. never doubt that and Push that Value to the forefront. It is What every Business should be providing in America. Value Build that back into the American culture and we all win.
David Berry’s comments are spot on. GEICO can spend more on customer acquisition than they make from underwriting profit in the first 2 years (or more!) which prices independents out of the market. Google will only add fuel to the fire by further commoditizing personal lines insurance. In a commodity market – it’s all about price. And don’t think commercial lines isn’t next! BOP underwriting is already being automated by many companies.
Neil – Raymond Burr is dead. Has been for a long time. The fact is, your agent associations can’t afford to compete head to head on brand with GEICO (or any of the other big brands) unless IAs start working together as a single voice. IA’s make up more than 35,000 small businesses around the country – that’s no small number. Imagine if we got out of our own way? Maybe that whole generation you mention might begin to understand who we are as an entire distribution model, rather than the one-off stale office on main street. As for banner ads, doesn’t it make better sense for IAs to spend their marketing dollars where consumers actually are (online) rather than in the Yellow Pages like we’ve done since the dawn of time? Clearly, whatever we’ve done in the past isn’t working.
“Thats the way we’ve always done it”. Yeah, I know……..
Dang! The value of my agency just plummeted. Should have sold it last year when I had a chance!
Google entering the CA insurance market may have a positive spin. Google has many quality employees that live in our local market area.
The professional independent agents may have less competition from the career agents and less competitive carriers. This may even lead to a sustainable profit for CA carrier survivors!
Google may also help provide more value to the consumer (mitigate the CA DOI interference in the market place). Google may be able to push back and enable portable persistency, rating based on zip code regions, decriminalizing CA DMV for non-driving issues, rational minimum coverage limits, etc.!!
Google may be able to use their influence to supersede the current CA default proposition routine to enable development of the insurance market.
Are huge discounts for self driving vehicles far off? If google controls the insurance flow as well as the technology the conventional carriers should be warned. Guess its not if but when.
How Google would be different from other websites which provide quotes from various insurers?
Why one would go to Google Compare and not to other websites?
It would be interesting to know if Google is just not providing the cheapest insurance available from a partner , it is also using some analytics while displaying results…..any input? What extra comfort it is bringing for customers
Bill Wilson correctly states that insurance is not a commodity, and implies that purchase decisions must reflect the fact that insurance is a risk management tool.
Read his ’Google Compare’…The Latest ‘Apples to Apples’ Auto Insurance Comparison Illusion”
http://www.independentagent.com/Education/VU/Pages/featured-resources/Commodity/WilsonGoogle.aspx
I hope Google Compare will do more than compare premiums…that they will help the “insured” identify exposures and appropriate coverages/limits; and that they will compare coverage and claim service.
HOLD THE PHONE!
Why all of the hoopla and panic about Google selling insurance online? Through Google’s new affiliate, CoverHound, insurers have yet another mobile insurance vehicle to offer their usual QUOTES and RATES on their products and services. But how insurance savvy are the directors and officers of Google or CoverHound?
Secondly, what agents, brokers, and producers should be concerned about is Google’s Search Engine Optimization (SEO) dominance! In 2014, Google had a staggering 65%+ of the market share of ALL online searches with Bing and Yahoo trailing at 19.7% and 8%, respectively. These OLIGOPOLIES control over 93% of the online search market!
So what? Well, Google doesn’t have to sell insurance, since they only need you and others to “GOOGLE IT!” when it comes to ANY matter concerning or buying insurance online. If CoverHound’s ads inundate the first 10 online pages on GOOGLE, Bing, and Yahoo, about any insurance products services, etc., who stands to lose more when customers attention span is less than 4 seconds to find what they are looking for online. Also, who stands to lose more when customers want to cut out the so-called middleman (AGENTS, BROKERS, and PRODUCERS) to deal directly with these online insurers?
But the likes of CoverHound, CompareNow.com, and other typical quote and rating services will never create a total disadvantage with auto drivers in California. In California, drivers can now compare the ACTUAL PHYSICAL auto insurance policy from over 130 insurers online, INCLUDING the comparison of several basic uncommonly known monetary benefits and features from these insurers within two (2) MINUTES or less. No questions to answer or forms to fill out and unlike the CoverHound arrangement with its panel of insurers, this new California service, Insurance Snoopers, Inc. (ISI) IS NOT COMPENSATED BY ANY INSURANCE COMPANY!
Ads from CoverHound-Google, CompareNow.com, Progressive’s Name Your Price Tool, Farmers University, and all others currently do not offer this level of insurance education and information from a claims perspective to existing customers or potential clients! The mobile insurance industry needs disruptive competitors like ISI to battle online direct writers or services like CoverHound-Google, which also protects agents, brokers, and producers from annihilation. ISI wants agents, brokers, and producers to stay the course in convincing folks that they do a better job in getting policyholders to understand any type of insurance, be it auto, motorcycle, boat, homeowner, business, life and/or health!
Lonzie, I like the concept of the site. It would have been nice if you would have disclosed in your comments that you and your wife are running it.
Auto insurance is a commodity. Understanding how it works is not a unique or valuable skill. I find it amusing that in comments on a story about Google there are people claiming that the grandmaster insurance agent wizards are the only ones who can crack the code of auto insurance coverage. Guess what? There is this site called Google where you can research car insurance and find out which limits are best for you.
Herb, What you say is true and also so far from reality that it is almost scary. I have been an insurance agent since the 1980’s. Coverage is simple but also very complex as the individuals circumstances can alter what is “good coverage” and what is a waste of money or even worse leaving the person exposed to risk. In simple terms insurance is the transfer of specific risk up to a specified amount from the client to the insurance company for a fee. People can easily obtain basic coverage via the internet, but the problem is that they (in most cases) do not know what they are doing and in the event of incident have no one to advise them as to their best course of action. The only true help they can hope for is a good agent. The call center people fro internet or “800” number insurers are for the most part short term people and are usually not versed in the particulars that come from each state governing insurance in the 50 States. Even the company I sell for will give you different responses than I will due to them having to comply with laws that I do not have to and having a different perspective. I feel it is right and proper to use all laws and rules to my clients advantage. So I will often give differing advice to meet the needs of different clients.
So, Yes you can “study up” what you need to know to buy insurance online and still “not know what you’re talking about” SO I advise finding a good agent that you feel comfortable with and at a rate that meets your needs. There is also a large difference in the actual contract from one carrier to another. “Cheap insurance can really mean CHEAP INSURANCE. When you buy online or 800 number you do not have the protection of the agents errors and omission insurance. You are really relying on your understanding alone.
Your statement about E&O is right on. If I make a mistake by not writing the correct coverage for a customer they can file on my E&O policy. If the customer buys via the internet then, any mistake is on them. This may very well be the most valuable aspect of using a professional insurance agent.
You have a point. BUT, do the consumers understand & care about this?
Anytime I have a good customer/account I bring it to their attention in our coverage review that they understand the additional protection they receive when going through an agent. By the way, I have one of the best retention rates of any agent in my sales district and the state. My customers understand the value of being with my agency.
Auto insurance is the burger job of the insurance world.
Wake up Herb! It isn’t just price and coverage limits these days. Carriers are using different policy forms that pay and defend differently. Unless the consumer is an attorney or an insurance agent the Google sites you mention doesn’t do any good. I can figure out how to fix just about anything given enough time and research on Google into the subject but, is it an efficient use of my time and intelligence to do so. NO- I am better off going to a professional if I don’t want to take the chance of misunderstanding what I read on Google and even then, hoping that Google published all of the information and got is accurate. Insurance is NOT a commodity – it is a contract and unfortunately these days it is NOT a standard contract.
The best insurance advisers will walk a prospective customer through an exposure checklist similar to those compiled by IRMI and the Big I Virtual University.
And they will ask current clients to report changes that may require new risk control and risk financing treatment.
When I shopped my personal account last Summer, I gave the insurance professional/adviser a copy of my expiring policy. They quoted what their best carier would charge and the coverages they would offer.
They expected that the lowest premium would win, regardless of how the coverages compared.
Does anyone else find it dubious, that all the carriers say that the low limit, constant rate shoppers with mostly minimum limits, are the most undesirable type of clients, since they do not have longevity and are very unprofitable… yet the carriers that participate in a platform of looking at rate only are going to attract mainly the type of customer that no one wants?
I know it is dubious depending on the carrier. The bigger companies like State Farm, Allstate, Travelers, etc. don’t have a pricing model that can consistently make a profit on what is considered non-standard auto customers unless they also pick up additional lines of business like the homeowners; which is usually a low percentage of the time. But some of the lesser known auto carriers are great at making a profit with those customers through fee revenues. They actually bank on a percentage of customers going through the revolving door since they pay for various policy and ‘payment type’ fees each time they start a new policy. Many of them also bank on a percentage of people buying to just get their id card for buying a car, etc. and then cancelling immediately. They collect a “down payment” from that customer ensuring they make a buck with minimal risk taken on. Most fee driven that I’ve seen are Mercury, the General, Bristol West, Viking. Quickly becoming a bigger market as advertising has pushed people to shop on price versus coverage.
I’m wondering if this will impact independent shops more than captive agents. For example, all of the various travel sites on the internet were supposed to make flying and hotel stays more transparent in pricing; which they did for the most part. Except that companies with a recognized brand figured out they could just not participate in those sites. Most notably Southwest Airlines who only sells through their own site. So they effectively shielded their brand from a distribution hijacking. Bigger captive agent companies could just do the same, but I sell more brands as an independent that are lesser known and feel like this is more of a problem for me than it is for a captive representing a national carrier.
Will, I think for sure it will impact agency shops that are primarily substandard to standard auto. Preferred auto / home agencies, for now, I really don’t know how significant of an impact this will have.
Too bad Google is comparing only prices and not policy forms but, this may soon end in Texas. There is currently a bill in the Texas House of Representatives that will either disallow named driver policies and/or require the agent/carrier have the customer sign a disclosure statement that the policy they are being quoted is a named driver vs permitted driver policy (Family Auto Policy) the insured may currently have with another carrier. Carriers are converting to named driver policies because it reduces their risk and allows them to charge a lower premium such as GEICO or as of 11/5/14 so does Progressive.
I also see that Google will further the progress of turning Auto and Homeowners insurance into a commodity.. I don’t see it as a good thing for the consumer (were is Harvey now). I’m hopeful that the masses will see they still need advice on coverage forms, limits and limitations and contact an agent to do a real job, oh and by the way for the same pricing..