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Most Asked Questions About Changing Commercial Insurance Agents

By December 17, 2020Business Insurance
Most Asked Questions About Changing Commercial Insurance Agents

The phone rings. You answer.

“Hello.”

“Hi, this is David Baily with Baily Insurance.”

You already know what’s coming. Another sales call. Another insurance agent trying to persuade you to make a move.  

Most likely, you’re not very interested. You’re busy and don’t have time for this little intrusion. You’re pretty happy with your current agent, or at least, happy enough. 

Why should you bother entertaining this call? Insurance agents are all the same.

And, even if you’re dissatisfied with your current insurance agent, you probably have some apprehensions about making a switch. Maybe you’ve made a switch in the past and didn’t get what you were promised. Maybe you don’t feel like you have the time you need to dedicate to making a switch right now.  And your concerns are legitimate. 

Unfortunately, insurance agents often overpromise and underdeliver.  And the quoting process can be quite painful. 

When I call a prospective client, I expect a cordial “no thank you.” And I’ve come to realize that behind that response is a lot of doubt and unanswered questions. These unanswered questions fuel skepticism about trusting another agent. 

That being said, I want to answer the most pressing questions I get asked about the possibility of working together. Here are the Top 7 questions I hear time and time again: 

  1. Do I have to fire my agent?
  2. I can’t afford to waste time. How long will the process take?
  3. How is an insurance agent paid?
  4. Don’t all agents do the same thing?
  5. Am I getting a fair price for my insurance?
  6. Can you just give me a quote?
  7. Why should I work with Baily? 

At Baily Insurance Agency, we are committed to transparency. We believe that the cornerstone to having a great agent/client relationships is honesty. It’s my hope that the honest answers to these questions will start us on the road to that kind of relationship.

1. Do I have to fire my agent?

Often this question isn’t stated, but it’s in the background of many business owners that we encounter. This can be a huge concern. Business owners have all kinds of reasons to want to stay with their current agent. 

Maybe they’ve been with their agent a long time. Maybe their agent is a friend or family member. Maybe their agent is super likable. Maybe their agent has performed well for them.

Whatever the reason, I want to assure you that “no” you do not have to fire your agent.

Our process is designed so that we can come alongside you and help you evaluate your current insurance program without taking the place of your agent. 

Our agency never wants to disrupt good and effective agent/client relationships. We believe if it isn’t broken, you don’t need to fix it.

In instances where staying with your current agent is best for your company, we offer our five-step blueprint process to help you identify areas of weakness in your current insurance program. 

We act as a second pair of eyes for you and your agent to determine your risk tolerance, evaluate your past losses, review your coverages and exposures, and assess your non-insurance risk transfer.

By looking at all of these factors before you go to market, you and your agent will be better equipped in establishing a long-term plan for your insurance program that will lead to reducing your premium and controlling your insurance costs.

2. I can’t afford to waste time. How long will the process take?

Everyone is busy and can’t afford to waste time. That’s true for you, and that’s also true for me. 

Unfortunately, this is not true of desperate and mediocre agents who are happy to waste their time, the insurance company’s time, and your time.

If you’ve approached insurance the traditional way, you know that getting a quote is not a short and simple process. With the traditional approach, insurance agents quoting your insurance will need to gather incredible amounts of information about your business to apply on your behalf. 

This process is generally long and tedious. Insurance applications can be 40 or 50 pages long. It is an enormous investment of time on your end as you gather information and communicate with the agent.

Sadly, this process often ends with dissatisfying results. It’s hugely disappointing to invest so much time in the quoting process only to end with a much higher quote than you were hoping for or no quote at all. 

To short-circuit this process, we never begin with quoting your insurance. We begin with a 15-minute meeting that quickly examines the root factors that drive your insurance costs. 

We look at factors like your claims management processes, your current risk exposures, your HR practices, and other non-insurance factors that heavily impact your insurance premiums.

We want to determine from the outset if we have the tools and resources your business needs to establish an effective insurance program. We don’t want you to be bogged down in the insurance quoting details before knowing that we will truly be able to help your business.

Even if we are not able to help you right now, we are committed to adding value to each business we meet with. We will share with you best practices that businesses similar to yours are utilizing to improve their insurance outcomes.

3. How is an insurance agent paid?

This is a common question that businesses often have about working with their current agent. Let’s face it, insurance, like many industries, is set up with a lot of conflicts of interest. I say this because insurance agents are paid a percentage of your premium.

Obviously, the higher your premium the more your agent is getting paid.

This reality often leads to agents doing a mediocre job. If your agent helps you create an insurance plan that leads to reducing your premium, it will also lead to reducing their paycheck.

To give you a clearer picture of what your agent is getting paid, here are the typical percentages that agents generally receive from your premiums.

  • Property and casualty (Property, Liability, Auto, etc) 15%
  • Worker’s Compensation  5-7%
  • Group Health (Employee Benefits) 3%

You can imagine that agents run the gamut in terms of how they truly perform for their clients. Some agents will gladly meet you for a round of golf and present you with a renewal that was simply “the best we could do.” While other agents are essentially part of your management team, helping you to control your risks and lower your costs.

Unfortunately, they tend to be paid the same regardless of their level of effort and expertise.

At Baily, we are open and upfront with our clients about how we are paid. If you are not receiving value, we understand that it doesn’t make sense to work with us. 

Also, if we come alongside you and your agent to help you with the insurance process, we do charge a fee for our services. Everyone agrees upon an amount at the outset of that process. 

We agree upon what we will do for your business and how we will be paid for those services. There are never hidden fees or surprise costs for the businesses we work with.

4. Don’t all agents do the same thing?

Just like I mentioned above, there is a wide variety in what insurance agents offer to their clients. And in all fairness, insurance is not a one-size-fits-all product.

The needs of your company can vary widely from that of other businesses. For instance, the needs of a sole proprietor independent contractor with no employees are much different from a 50 employee municipality and those are both completely unique compared to a 300 employee contractor working on federal projects. The needs are vastly different.

And not all agents have the resources available to meet the needs of every business. 

You may be concerned that as a mid-size agency we won’t have the resources available that you need for your insurance needs. That is a common misconception.

As a Keystone Agency, Baily Insurance has resources available to all of our clients that typically are only available at large national agencies.

And if we don’t have the resources you need, we don’t want to pretend we can pull off adequately servicing your account. If we are not the best fit for your company, we will honestly disclose that to you and help you find an agent who can meet the needs of your business.

5. Am I getting a fair price for my insurance?

This is a burning question that most businesses have about their insurance. They want to know that they are getting a fair price, that they are paying the same amount that their peers are paying for insurance.

So how can you know if you are getting a “fair deal?”

Unless you go out and poll your competitors and peers about their insurance premiums, it can be pretty difficult to assess. 

At Baily Insurance, we want to answer this question for you with more than a “we think so.” We present our clients and prospects with credible data that shows them how their current insurance program compares to their peers. 

In regards to your property and casualty insurance, your work comp, or your employee benefits we want to clearly show you how you stack up against your peers.

In doing this, you will also gain valuable information about what you can do to improve your premium rates or continue to keep your rates low.

Also, having this information at your disposal allows you to hold your agent accountable. This is an excellent tool for evaluating your agent. 

On a personal level, we use this marker to evaluate if we are doing an excellent job for our clients. When we tell our clients and prospects that we offer excellence in the way we do insurance, we want the data to back up those claims.

6. Can you just give me a quote?

Ok, let me give you a quick answer to this. We sure can!

However (yes, there’s always a however)…simply providing you with a quote usually comes with a cost. Without addressing the most important factors that impact your insurance premiums, just quoting your insurance is usually a disservice to you.

Like I said earlier, quoting insurance takes an enormous amount of time. Without addressing the underlying factors that affect your insurance premiums, you can not get an accurate grasp on what you ought to be paying.

You may be thinking, “Well, I saved 5% on my premium this year.” But what if you should have saved 35%? Maybe you saved $10,000. What if you could have saved $30,000?

Without digging into the factors that influence your premium, you will not be able to assess if you are paying what you ought to be paying for your policy.

When you short-circuit looking at the factors insurance companies use to quote your insurance, you will never get the best long-term results for your insurance program.

At Baily Insurance, we see it this way. You would never ask a doctor to prescribe a treatment without seeing or talking to you first. Or you would never ask a mechanic to fix your car without first “looking under the hood.”

In the same way, we believe it would be reckless, negligent, and even dangerous to quote your insurance without a thorough investigation into your current business practices that impact your insurance program. 

As the saying goes, “you never get a second chance to make a first impression.”  The same is true of insurance. Make sure you are prepared before approaching the insurance marketplace.

In a few short meetings, we dig into these factors to get a thorough picture of your insurance strengths and weaknesses, before we ever jump into the quoting process. 

7. Why should I work with Baily Insurance? 

Most insurance agents quote commercial insurance the traditional way – gather information and go to the insurance marketplace. 

The reality in insurance is that the traditional quoting model is broken. It encourages people to go to market, before creating an effective insurance plan for their business.

If you only take away one thing from this article, let it be this: 

Quoting is only the tip of the iceberg. If you don’t identify the root causes that are driving your insurance costs long-term, you will never create an effective insurance program for your business.

Candidly, our agency is not for everybody. We tend to offer the most value for businesses that are spending at least $100,000 in premium (and $250,000 for group health). 

By engaging in our 15-minute introductory meeting, we can get a fairly good evaluation of whether we will be able to add value to your business and help you establish a robust and effective insurance program.

And if, at the end of the day, you decide we are not a good fit for your business you will still walk away with better insight into your current insurance program that you can use with your current agent as you design your insurance program.

Our agency has been able to help businesses time and time again drive down their insurance costs and take control of their insurance program. Our agency also brings additional resources to our clients

I’m curious about your process. How can I learn more?

To get a good feel for the value we may be able to add to your business, we’d love to set up a 15-minute introductory meeting to hear about your company and what is most important to you. 

In those brief minutes, we will be able to identify what areas may need improvement in your current insurance program.

Remember we focus on the premise that quoting is only the tip of the iceberg, so our initial meeting will touch on the factors within your control that impact your insurance premiums. 

Our conversation will focus on assessing these four factors:

  1. Risk tolerance
  2. Loss analytics
  3. Exposure mitigation
  4. Non-insurance transfer 

If you’ve always had your insurance quoted the traditional way, you may not be familiar with these factors. And if you are familiar with them, you may not be implementing best practices in those areas. 

To be better prepared before our conversation, it may be helpful to read more about these factors and why they are important to your insurance program. 

We are excited to walk with you through our blueprint process, to clearly explain what you can expect from us, and to help you find long-term solutions to your insurance needs.