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The Promises We Make, the Promises We Keep

February 9, 2010

Chris Garlasco, Owner & Managing Partner - Founders Insurance Group

A young man walked into one of our offices this past week looking for an insurance proposal. He had done quite a bit of research prior to coming in to see us. He had decided on his coverage amount and knew what he wanted. He asked us to price the exact same coverage and he would make his decision based on the prices results of his coverage research.

In hearing this I thought of two cars. Each car has air conditioning, each car has leather seats, and each car has a great stereo system and power everything. Each car happened to be a beautiful sky blue pearl. As a matter of fact each car had similar options across the board, yet one car (Car “A”) was about $25,000 and the other nearly $100,000. (Car “B”). I guess then it’s safe to assume that Car Company “B” won’t be in business for very long. Their product must be inferior since it costs so much more. Now, you and I both know that this is a silly story. As a matter of fact, part of the American dream to many American’s is the dream of being able to own a fancy car.

So, the question that haunts me over and over is why it is that when it comes to buying insurance, the logic that we use on almost every other purchase we make in life suddenly changes?

The young, well intended man was missing the most important point. Insurance isn’t just about purchasing the right coverage any more than making sure each car has four wheels. It’s about the
promises we make and our record of keeping those promises. Many companies offer $300,000 of liability coverage, that’s the promise. However, that’s where the similarities end. Beginning at the moment of a large loss, we find out how good our insurance coverage really is and who best lives up to their promises.

As an independent agent, not employed by any insurance company, we are in the best position to offer advice based on experience with many companies in the marketplace. It’s a level of experience that goes beyond independent customer surveys. Independent agents generally are better advocates because not only do they have a deeper understanding of the contract, but often times they are familiar with how to work within and around the system with each carrier if a claim issue arises.

In the same fashion that an attorney’s value comes from representing the client’s interests through the complex legal system; a large independent agent represents those interests in the complex and often nuanced insurance system. Independent agents generally have an understanding to each company’s approach to claim payment and policy language differences. One company may be to the “letter of the law “in pinching pennies on a loss. Another company may not have that philosophy.

One of the things that we here at Founders are known for is our extensive background in insuring high value homes. One of the companies that we use in that market is Chubb. In general terms, Chubb is often times the most expensive insurer in our office yet we grow our customer base with Chubb on a consistent basis. Why? Those that own a high value home understand that they are buying not only a great promise, but a company that has no peer when it comes to making good on that promise.

There are three components that consumers should look for when spending their hard earned bucks on a policy. The first is the correct amount of coverage, secondly the competitiveness of the product and thirdly and most importantly, the promise.

Thanks for your valuable time! Have a great day!

Chris Garlasco

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5 Comments leave one →
  1. Ashley Whitney permalink
    February 9, 2010 12:17 pm

    Nicely said Chris!

  2. Chris permalink
    February 9, 2010 12:29 pm

    Thanks Ashley!
    Chris

  3. Tom Neseralla permalink
    February 11, 2010 10:22 am

    Chris,

    Most traditional agents sell policies not risk management. When so much of the typical agents focus is on price and /or policy jargon, they position themselves as nothing more than a commodity broker.

    I think most of the problems for the traditional agent are self inflicted.

    Tom

    • Chris permalink
      February 11, 2010 1:40 pm

      Hi Tom;
      I do agree with you, but only to a point. I wrote a blog entry a few months ago entitled “Have I Got a Proposal For You” in which I talked about independent agents getting on the “price train.” The direct result, to your point, is that they have lowered themselves to the commodity sale. My view is that this has been to the self inflicted peril of Independent Agents. On that point we agree. However, I would take it a step further and point out the bigger issue and that is that the independent agent has not done a very good job at two things: First, IA’s have not been defining their value proposition and communicating it to clients. Secondly, the buying habits of the consumer have changed and IA’s have been slow to respond. It is my second point however that I only somewhat feel that this has been self inflicted wound. Carriers are now spending more money on branding than some entire mutual companies collect in premium. There are resource limitations to agents as most of them are small business’s.

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