Our
Steamy Story
Insurance
Rip-off Tips that will save you a ton of grief
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OK,
no one does this on a web site. You can read
the single paragraph “brochure” version
of who we are on the About
Us page, but this is who we are at
a gut level and some lessons from the Insurance
Insider School of Hard Knocks. Here, you’ll
be reading about us, but this is really about
you and tips that will help you do a better
job of buying insurance – from anyone.
Want to really “size us up” and
know who you’re dealing with? Let me
tell you the story:
You know how it is. In the 80’s when starting out in Business
Insurance I was so green I was wilting. –Snagged a job
with the largest writer of Workers Comp in the U.S. to peddle
their wares in my home town of Fort Worth. A real “blue
chip” job with the best in the Commercial Insurance business.
With no experience and little more than their training in the
bag, the first account I got the chance to quote was a business
owned by a friend of my father. He was “gonna let the kid
take a stab at it”. I brought his information back to the
office with a lot of fanfare. The Sales Manager even came from
Dallas to help put the applications together. I did little more
than watch him do the task and then pitched his underwriting
results to the prospect and SOLD!
Tip
#1-Scamming the
Payroll
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This
business was looking easy
until six months later
when I got a call from
the bookkeeper for the
client asking why the payrolls
on the policy were so low.
Dad’s friend was
unreasonably gracious,
even though he never knew
it was my Manager who “played
funny” with the numbers
to get him such a “great
price”. Of course
that “deal” would
only last until the insurance
payroll audit billed the
understated difference
at the end of the policy
year. (So, Tip
#1 – Never accept
an insurance proposal without
knowing the rating or exposure
basis of the quote. Don’t
just accept a low number.
It simply may not stick.) There
are similar shyster tricks
in Business Auto, General
Liability... you name it.
Undaunted
by the whole tawdry and
embarrassing affair and
convinced it was a professional
business, after a while
I sought professional guidance
from the star Business
Sales Rep in the office
(and nearly top in the
Region). The company was
really good at Workers
Comp, competitive at other
insurance, but frankly
I thought their Life Insurance
policy was a bit of a dog. –One
of those “build cash
value-type” policies
that frankly didn’t
build very well, but made
the insurance company a
lot of money. We had a
quota to sell some of those
to our business clients.
It was important enough
that some of the guys just
bought the quota on their
own life and extended family.
The star Sales Rep always
blew past the quota. He
seemed like a life insurance
machine so I asked his
advice. He took me under
his wing and shared his
magic. The “secret
sauce”? -Inflate
the cash value forecast
on his proposals till it
was just “good
enough to eat”, but
not so much that it was “hard
to swallow”.
Just make up a song they
want to hear and they’ll
buy it almost every time.
I never actually confirmed
the rumor, but folks suspected
he did the same thing on
Workers Comp dividend forecast
exhibits. (So,
Tip #2 – Put a note
on your calendar to confirm
if you actually get any
forecast that was promised.
It could be dividends,
investment returns or services). Often
those promises get muddled
or forgotten a year later
and many insurance people
know it so they over-promise,
under-deliver and never
get caught.
There are a few rotten apples in every barrel and I am convinced
that most in the Commercial Insurance business are not like those
guys, but I’ve seen lots of examples like these over the
years in one form or another. In the early days I really wondered
if an honest guy could make it in this business and those struggles
left a scar. The promise about honest advice in the banner above
this page is more than a slogan. It’s a heart felt commitment
that’s come from hard knocks. For us it is central – not
just honor among thieves, but honor ...period.
People
often think of insurance
agents as a seedy lot.
We rank somewhere between
huckster used car dealers
and ambulance chasing lawyers
in the mind of many. After
hearing the above stories
you probably think we earned
that unenviable reputation
and you have a point. In
truth, Risk Management
is a professional discipline
when practiced well and
it can be a sophisticated
financial transaction on
which businesses are dependent.
But, like the IRS we are
always asking for money
and no one likes that.
Are you ready for a shock?
You might be surprised
to know that Business Insurance
guys think of themselves
as the cream of the insurance
crop - perhaps the cream
of the business advisor
crop. Most of them think
they’re really a
cut above those Life insurance
guys and even the people
that sell personal auto
insurance. And of course
all of them look down their
nose at claims adjusters
and loss control people
that can’t do their
job without making someone
angry. I guess it’s
because of the stodgy training
and because some agents
write really big accounts.
Here’s where
that snobby attitude gets
them into trouble. They
can also act like prima
donna Doctors, paranoid
that if they don’t
sell the customer everything
he’ll buy, they’re
scared to death the customer
will sue his sox off if
there is an uninsured claim.
Also, you should know that
some policies are just “beneath
him”. Now I think
businesses should have
great protection, but I
also think there are some
cases where business owners
look at the premium and
decide to take the risk.
Some business owners are
more risk adverse than
others, but taking risk
in return for profit is,
after all what business
owners do every day. They
just like to understand
the risk and decide. Surprisingly,
that is what resulted in
our romance with restaurants.
Return
again to the story. In
the late 80’s the
Workers Comp system was
at its absolute worst and
Texas was almost the worst
in the nation. Most felt
the system was totally
out of control and the
press sometimes included
articles about businesses
leaving the State due to
cost. Texas has always
been a maverick in insurance
law. One of the biggest
differences compared to
other states was that businesses
were never forced to be
a part of the State Workers
Compensation system (legal
disadvantages acknowledged –check
out our free resources
section for additional
information). At that time
there was little else a
business could buy to control
the work injury risk except
for a very large deductible
liability policy from Lloyds
of London. ...Enter, insurance
snobs afraid of risk. Almost
no agent would sell the
insurance. Selling
anything other than Workers
Comp was frankly considered
reckless (and dare I say “evil”?).
Even now, when the State
estimates that about 52%
of restaurants DON’T
buy real Workers Comp and
the policies have improved
drastically, many
agents still try not to
sell it because of perceived
risk and legal complexity.
Even if they sell it, they
don’t do it very
well. Want proof? Just
Google or Yahoo “Restaurant
Insurance Texas” and
look for just one that
mentions anything other
than Workers Comp. I doubt
you’ll find a single “Restaurant
Insurance Expert” that
will advertise an ability
to serve that half of restaurant
owners! ...Interesting
isn’t it. How can
they can be restaurant
experts and neglect half
of the market for the most
common source of insurable
business loss?
Well, in 1991 we wrote our first restaurant account. A co-founder
of the agency prospected a 300 location franchise that had almost
100 company owned stores. They were already intending to leave
the Workers Comp system but their agent wouldn’t help them
set up the policy. We managed to work it all out and the client
estimated almost a million dollars in savings in the
first 2 years due to reduced premium and more flexibility
in controlling claims. We’ve enjoyed the independent entrepreneurial
spirit of restaurateurs ever since. A year later we worked with
a safety firm, Lloyds of London and an employee benefits company
to create a safety group program that made reasonable work injury
benefits and liability coverage available to smaller businesses.
Over the years, the Workers Comp system got a lot better and
we currently have more premium in the system than out of it,
but many restaurants simply don’t want to buy “real” Workers
Comp. Our position is to get the best policy for the best price
and help customers understand the difference. (Tip #3 –Buy
from an agent that wants to sell the best of what you want to
buy).
So there we are. We can advance thru the years and tout professional
credentials with initials that won’t make much sense if
you’re not in the insurance business, but basically, the
header at the top of the web page tells you what we do at our
core. Perhaps a little more candidly, we are honest,
non-“insurance snobs” that give you great advice
and the best deal on what you want to buy. We’d
rather earn a nickel than steal a dime. You can put fancy words
to it and call it a mission, but we’re passionate about
honest, effective advice and providing a great price. It’s
what you’ll get if we do business.
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