If they are buying a more expensive policy because the cheaper one does not provide what they need I am not sure that number is relevent. If they buy the more expensive one due to service or reputation yes but if the cheaper one does not provide the coverage you need there really is not much of an option.
sometimes that doesn’t matter Dan. Sometimes the insured just sees the price and doesn’t look beyond that. And in some instances the lower priced carriers might offer less coverage to the insured but a higher commission to the agent so the agents the customer in the wrong direction.
Price is a byproduct of multiple variables each of which can fluctuate considerably from carrier to carrier. But as an Independent adjusting firm representing over 200 insurers, there is a demonstrable relationship between premium and service both before and after a claim happens. The old adage ‘you get what you pay for’, is indeed a truism. With claim handling, some insurers will respond within 30 minutes, a few as many as 30 days. Guess which generally has the higher premium.
I sell primarily nonstandard auto and have seen a flood of new clients who previously had preferred coverage, but were NOT happy with claim handling, customer service, and price. As the economy has tightened up, they are dipping their toes in the nonstandard market and are pleasantly surprised by the change.
Tavisha- I hope you are really looking at the coverage difference and have a good E & O policy or hope your boss does….your customers may be unpleasantly surprised when denied coverage they had on a prior preffered policy you moved them from.
My experience is that there’s two types of commercial insurance buyers: those looking to actually have peace of mind, and those looking to satisfy some kind of contract/agreement. To the latter, price is the only issue.
I don’t know where the customers are located that took this survey, but they weren’t from my area. It is all about the $$. Must be the same bunch that claim they never had a claim until you pull their clue or loss runs, then their memory returns. The “piece of mind” customer is quckly turning into a thing in the past.
The longer I hang around the more I believe that agents just do not get it. Of course everyone is concerned about price because no one (not even the wealthy) wants to pay too much. Everyone has concerns about coverage and deductibles.
Too few agents listen to their customers as they seem to have preconceived ideas on what the customer wants. When someone says (like the guy in the article)that “customers are looking for the lowest price, period” I wonder if many agents have lost their touch.
Listen and you will learn.
Doug, I totally agree with you! I work for a company that strongly preaches to sell benefit not price, and it’s amazing how many agents don’t think value (aka getting the right coverage) is really what their customer wants. Of course it is! At the end of the day, if you claim isn’t covered what was the point of paying all the premium??
When it comes to IAs, it is VALUE that is YOUR product. 1.) You are there today – and tomorrow. With the Direct-response carriers, you get “phone clerk roullete”, a different clerk each call, and never the same one twice. 2.) You give claim advice. With the direct-response and even the captive agency carriers, the sales and the claim people do not interact. And, how many times have you seen a CLUE Report showing claims reported with $0.00 paid? We talk our customers out of reporting non-claims; the driect-response and captive agent claim # reporting the call to CLUE, even if it’s a simple inquiry. 3.) We give choice. Yes, Progressive can quote other carriers; we can not only quote them, we can write them too – while the customer never leaves their seat or the other end of the phone, or directly from our website. 4.) Finally, when there is an issue, we IAs have the autonomy to go to bat for the insured. Check’s not enough to fix the damage; the carrier wants to use aftermarket parts; the carrier isn’t using common sense? The response from the direct-response or captive agency company to the customer is often “go scratch”. We have actually gotten captive carriers who have denied past claims to reopen and pay because the adjusters had made “errors”, such as depreciating building elements when the customer had replacement cost coverage. Like with the commercial – the GEICO koolaid taste good – until you have to suffer through driving your own car to an inspection station, contending with the guy with a clipboard, and trying to get your car fixed for that price. Then, try getting the faulty paint job fixed on your own. Good Luck!
MarketMaker: so very true! It’s no secret that Geico claim handling (it would be improper to use the word “service”) is hands down the worst out there. I was in a vehicle struck by a Geico customer and it was the wort experience imaginable trying to get the vehicle repaired. They definitely do not go out of there way to make things easy! People who pay for coverage with Geico are wasting their money.
I’m reading this article late, but I agree with Dan Fagan above. I don’t believe it’s fair to compare two products on price where the two products offer different coverages.
What would be interesting to know is – when the client has found two products that both match the coverages they are looking for, do they then choose the cheapest of these available options? So effectively, is the customer still choosing the cheapest product (of those that fits their needs)?
Another very good article for agents that will never get read.
If they are buying a more expensive policy because the cheaper one does not provide what they need I am not sure that number is relevent. If they buy the more expensive one due to service or reputation yes but if the cheaper one does not provide the coverage you need there really is not much of an option.
sometimes that doesn’t matter Dan. Sometimes the insured just sees the price and doesn’t look beyond that. And in some instances the lower priced carriers might offer less coverage to the insured but a higher commission to the agent so the agents the customer in the wrong direction.
Personal Lines or Commercial?
Large accounts or small?
Line of business?
Useless article is useless.
Price is a byproduct of multiple variables each of which can fluctuate considerably from carrier to carrier. But as an Independent adjusting firm representing over 200 insurers, there is a demonstrable relationship between premium and service both before and after a claim happens. The old adage ‘you get what you pay for’, is indeed a truism. With claim handling, some insurers will respond within 30 minutes, a few as many as 30 days. Guess which generally has the higher premium.
I sell primarily nonstandard auto and have seen a flood of new clients who previously had preferred coverage, but were NOT happy with claim handling, customer service, and price. As the economy has tightened up, they are dipping their toes in the nonstandard market and are pleasantly surprised by the change.
So they are leaving the preferred market and going to the non standard market because of price? That doesn’t make sense
You work for Farmer’s and sell primarily non-standard auto???
Tavisha- I hope you are really looking at the coverage difference and have a good E & O policy or hope your boss does….your customers may be unpleasantly surprised when denied coverage they had on a prior preffered policy you moved them from.
My experience is that there’s two types of commercial insurance buyers: those looking to actually have peace of mind, and those looking to satisfy some kind of contract/agreement. To the latter, price is the only issue.
I don’t know where the customers are located that took this survey, but they weren’t from my area. It is all about the $$. Must be the same bunch that claim they never had a claim until you pull their clue or loss runs, then their memory returns. The “piece of mind” customer is quckly turning into a thing in the past.
The longer I hang around the more I believe that agents just do not get it. Of course everyone is concerned about price because no one (not even the wealthy) wants to pay too much. Everyone has concerns about coverage and deductibles.
Too few agents listen to their customers as they seem to have preconceived ideas on what the customer wants. When someone says (like the guy in the article)that “customers are looking for the lowest price, period” I wonder if many agents have lost their touch.
Listen and you will learn.
Doug, I totally agree with you! I work for a company that strongly preaches to sell benefit not price, and it’s amazing how many agents don’t think value (aka getting the right coverage) is really what their customer wants. Of course it is! At the end of the day, if you claim isn’t covered what was the point of paying all the premium??
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When it comes to IAs, it is VALUE that is YOUR product. 1.) You are there today – and tomorrow. With the Direct-response carriers, you get “phone clerk roullete”, a different clerk each call, and never the same one twice. 2.) You give claim advice. With the direct-response and even the captive agency carriers, the sales and the claim people do not interact. And, how many times have you seen a CLUE Report showing claims reported with $0.00 paid? We talk our customers out of reporting non-claims; the driect-response and captive agent claim # reporting the call to CLUE, even if it’s a simple inquiry. 3.) We give choice. Yes, Progressive can quote other carriers; we can not only quote them, we can write them too – while the customer never leaves their seat or the other end of the phone, or directly from our website. 4.) Finally, when there is an issue, we IAs have the autonomy to go to bat for the insured. Check’s not enough to fix the damage; the carrier wants to use aftermarket parts; the carrier isn’t using common sense? The response from the direct-response or captive agency company to the customer is often “go scratch”. We have actually gotten captive carriers who have denied past claims to reopen and pay because the adjusters had made “errors”, such as depreciating building elements when the customer had replacement cost coverage. Like with the commercial – the GEICO koolaid taste good – until you have to suffer through driving your own car to an inspection station, contending with the guy with a clipboard, and trying to get your car fixed for that price. Then, try getting the faulty paint job fixed on your own. Good Luck!
MarketMaker: so very true! It’s no secret that Geico claim handling (it would be improper to use the word “service”) is hands down the worst out there. I was in a vehicle struck by a Geico customer and it was the wort experience imaginable trying to get the vehicle repaired. They definitely do not go out of there way to make things easy! People who pay for coverage with Geico are wasting their money.
I’m reading this article late, but I agree with Dan Fagan above. I don’t believe it’s fair to compare two products on price where the two products offer different coverages.
What would be interesting to know is – when the client has found two products that both match the coverages they are looking for, do they then choose the cheapest of these available options? So effectively, is the customer still choosing the cheapest product (of those that fits their needs)?