(206) 282-1712 Seattle, WA

Vance's Column

What Every Insurance Agent Would Like You to Know

These comments are based on over 40 year’s experience. My goal is to help you become an educated and knowledgeable insurance consumer. That knowledge will not only save you money, but more importantly will keep you from harms way. I hope you will read this and come away with information your prior agents would like to have shared with you, but simply didn’t have the time?

You’ll remember several years ago the largest insurance company in the world went into default, saved by a $187 billion Federal bailout. Understandably that’s impacted the insurance industry. As a result, we need to not only purchase our insurance differently; we must also manage our insurance differently.

* Ask yourself “why do I buy insurance?”

o The answer should be; the only reason any one should buy any form of insurance is to protect us against a catastrophic loss. Keeping in mind insurance rates/premiums have always been based or rated on “responsibility.” The insurance industry has far more ability to monitor us than ever before and our premiums are far more determined by our behavior. To gage responsibility is now based on a “tier” method. To determine our tier is complex. It’s been reported 50% of a person’s tier is determined by their credit scores. High credit scores reflect greater responsibility. People with tickets, accidents and claims do not reflect the same responsibility as those without tickets, accidents and claims. Low liability limits reflect less responsibility than those that carry higher liability limits. Low deductibles send the message your intent is to turn in claims. People moving from insurance company to insurance company fail to reflect stability and are considered labor intensive. These and more are some ways which may now impact your future premiums. Insurance companies will offer initial discounts to appear more competitive to get your business but those discounts are then lost. The less responsible we exhibit ourselves the higher the likelihood we’ll have claims, hence higher premiums.

* I’ve encouraged my Customers since 1973 to increase your liability and Uninsured/Underinsured motorist coverage since this is where your biggest exposure to loss is and offset that higher premium by increasing your deductibles. Inasmuch as you’re not buying insurance for those minor claims, you’re placing the coverage where you need it the most. This also provides a benefit to your tier of your intent is to purchase insurance only for catastrophic claims which reduces and stabilizes your premiums and again reflects responsibility.


* Steps to consider prior to submitting a claim?


* Determine the cost of repair or replacement.

o In the event the damages in your opinion would not be catastrophic, why invite your insurance company into your home? Remember, the insurance industry isn’t in business to pay claims but make money. Claims = higher premiums. It’s always been that way and will always be that way.


* Determine the cause of loss?

o Since claims will now cause a negative hit to your tier before contacting your insurance company determine if there will be coverage. Review your contract and most certainly contact me. A claim with zero paid is still a claim and will jeopardize your premiums and you’ll now suffer the consequences that were not evident a few years ago.

* But wait … why will my rates go up if the insurance company doesn’t pay?

o The reason is by law the insurance company is required to investigate the loss. They must hire an adjuster, do their due diligence and this costs money, which is now rightfully charged to the Customer.

When approaching insurance, always ALWAYS approach any insurance matter methodically. Those knee jerk reactions can hurt you in ways you may be unaware. That’s why I always prefer you contact me first. Unlike those captive agents with State Farm, Allstate, Farmers, GEICO, etc. who contractually can only represent one company, I’m an independent agent meaning I work for you not the insurance company. Or, I am not a one company agent but can direct you to the company that will offer you to the broadest coverages for the most competitive price. And the best part, I’ve never charged a fee. I am paid a 10% commission by most insurance companies.

* Vance, aren’t all insurance companies and their contracts the same?

o To think that would be as close to the truth as north is from south. Some companies like Pemco, Progressive, MetLife, etc. have worked hard to build a reputation based on highest standards of integrity. Many companies not so much. Contracts are also significantly different. The most dangerous way to purchase insurance is via the Internet or 800 phone number since you’ll never speak to the same person twice. In which case you are acting as your own insurance agent.

* Consider this for a moment?

o I would imagine you are like most people who have never read their insurance contract(s) cover to cover, let alone studied their insurance? Insurance contracts are written by high priced insurance company attorneys to protect the insurance company. Looking back at our education I would suggest there wasn’t ten minutes spent teaching us about insurance? As a result, sadly most people have very limited knowledge of insurance. An insurance agent is licensed by the State and is required by law to complete so many hours of education each year. Ask yourself, would you hire a mechanic to work on your car who had never lifted the hood of an engine? Of course not, but when you purchase insurance over the Internet or an 800 phone number, aren’t you acting as that mechanic? There is a reason to have an experienced, qualified, knowledgeable mechanic, plumber, electrician, etc. and yes an insurance agent.

o Another thought: When the worst happens in your life I’d suggest there are three people you’ll call first: Your doctor, your attorney and your insurance agent. Ask yourself do you truly want to trust your financial future to someone inexperienced?

I’ll admit I am very protective of my Customers. I’ve always been that way and I suspect after 42 years I won’t change any time soon? Remember, turn in claims your premiums go up ~ right? The more you pay the more money the agent makes ~ right? I’m working hard to not only protect your coverage, but to avoid your premiums increasing. Remember when insurance companies cancel their Customers, they call me! I cannot give you the protection you deserve without your help.

In closing let me repeat, we need to not only purchase our insurance differently we need to also manage our insurance differently. Our business is to protect you when the worst happens.

Thank you for your business!