The Insurance Fixer Newsletter

Scott Simmonds, CPCU, ARM

Insurance from an Unbiased Point of View

October, 2006 -- www.ScottSimmonds.com

The Insurance Bid Process

I'm urging my clients to bid their insurance. The past few months have proven to me that many insurers and agents do a better job of pricing renewals when there is real competition for the business. A few months ago I brought this point out in this newsletter. The September and October renewals have just confirmed that point - in spades!

I have had several full-bid projects in the past few months. They resulted in great premium savings for my clients - as much as 40%. Coverage also improved.

I had several clients who renewed coverage with their current agent and insurer without competition. In most of those cases, the incumbent insurer asked for a premium increase. I had to kick and fight to get a renewal at last year's rates. Granted, if the account went to bid last year there may have been less room for movement this year. However, the marketplace clearly reacts to competition by providing better coverage at a better price.

I'm catching some heat from agents on this issue. I don't care. If you want the best coverage at the best price you need to bid your coverage. If you bid last year, ask your agent to convince you why you shouldn't bid again.

Traditionally insurance programs are only put out to bid every three years. Many insurance companies are taking advantage of accounts that don't go out to bid.

If you have not been out to bid in the past three years you will pay way too much for your insurance if you don't bid this year.

I insist on a fair bid process. I try to limit the competition to two agents - incumbent and one more. Sometimes I'll bring in a direct writer or a special industry program. Nobody gets any special treatment. I do not disclose proposed premiums until the process is over. Incumbent agents should not get the last shot - almost anyone can hit a stationary target in this market.

Clearly price is not the only issue in insurance. Quality of agent and insurer is important. Quality of coverage is vital. A bid process done correctly can get you the best coverage, price, and service.

Laptop Protection - You have a security vulnerability if you or your company have laptop computers. The theft or loss of the computer compromises the data on the hard drive. A logon password is not protection. I probably can't crack it - my son and most of his friends can though. Way too easy!

Encryption is a solution. Ask your IT people (or computer consultant) how encryption can help. I've been told that there is a free program that offers excellent protection - TrueCrypt. Talk with your computer expert. Protect your data, your security, your customer's privacy and your company's reputation.

Life In Maine And Other Stuff - The fall colors in Maine are past their prime. Columbus Day weekend was the peak of foliage. We now have beautiful days and cool temperatures to rake the leaves. A chipmunk has taken residence up in my garage. He chewed through the rubber bottom on the door over the weekend. Perhaps an accident will befall the rodent soon.

Several readers have asked me about my violin playing of late. I'm still terrible. It's fun though, a real break from my everyday work. Part of the attraction is that I play an instrument made in 1907 by my great great grandfather.

Biggest Insurance Mistakes White Papers - Get my white papers covering the biggest business and personal insurance mistakes. Send a blank email to bizmistakes@ScottSimmonds.com for a copy of the business mistakes paper. Email to personal@ScottSimmonds.com for the personal insurance version. No cost.

Your Privacy - I will never sell or distribute your email address to any other person or organization.

Do You Have The Right Insurance? Contact me to discuss an unbiased review of your insurance program. Do you have the right coverage? Can your policies be fine-tuned to improve the protection? Can changes be made to ease the administrative burden insurance causes? Are you getting the service you should from your broker? I can help. Call 207.284.0085 or email me at Scott@ScottSimmonds.com. Remember, I don't sell insurance so I'm unbiased.

Need A Speaker? I'm pleased to speak to trade, business, or service associations about insurance topics. Call 207-284-0085 or email me at Scott@ScottSimmonds.com. See my speaker's page at www.ScottSimmonds.com/ispeaker.html.

Forward This Newsletter To Your Friends - Feel free to pass this newsletter on to others whom you think would be interested.

Scott Simmonds, CPCU, ARM
Insurance Consulting
Phone 207-284-0085
Scott@ScottSimmonds.com
ScottSimmonds.com

Comments regarding insurance policies or products in this newsletter do not constitute an endorsement. I accept no fees or payments of any kind from any company mentioned in this newsletter.