Perhaps the most important step in getting the most for your insurance dollar is finding the right insurance expert to assist you. Though we live in a society that promotes the do-it-yourself approach in most things, insurance is an area where it pays to have professional help. The financial consequences of a business loss can be devastating, and the legalese involved can be difficult to understand, so take the time and effort to find the right insurance company and agent for your operation.
When purchasing your business-insurance policy, working with a licensed agent or broker doesn't add to your out-of-pocket cost and can contribute greatly to your recovery and satisfaction if you have to make a claim. While you could find a company willing to issue a policy without providing counsel, keep in mind the use of an agent does not increase the cost of insurance. In many cases, it can save you money. Finally, if professional service is included in the price of the product, you owe it to yourself to get what you pay for.
Some business owners resist working with an insurance expert for fear of being oversold or pressured into buying insurance they do not want or need. But remember, you choose your agent or broker, so you can select someone you trust and like. The importance of trust is self-evident: You need to know you're getting sound advice and the coverage you need to handle unforeseeable events. When you also have a rapport with your agent, you'll be more likely call, ask questions, and discuss changes in your business that may be important to your insurance protection.
For example, you just bought a new golf cart to use on site, but you don't know if it's insured under your policy. Or you’re thinking about upgrading your security. Will that reduce your premium and, if so, how much? You should feel comfortable calling your agent for answers. Unlike when you call your attorney, no little clock will start tallying a charge for advice. Professional service is part of your insurance premium.
But there are a few more things to look for in an insurance agent or team than trust and a compatible relationship. Experience, education and the company's resources should also be considered.
Although someone new to a profession may be good, experience will make a difference. A seasoned insurance agent will be more likely to ask the right questions to identify your sources of risk. He will also know the insurance products and companies that provide the best coverage for your needs. Experienced agents will have worked with clients during losses and the adjustment process, and that claims experience will have taught him a great deal about how to best assist clients in the future.
The benefit of experience is often enhanced by good education, and this is as true in insurance as it is in other professions. While you will not find many universities offering a degree for insurance studies, the industry has developed its own schools and organizations with the purpose of teaching agents to understand insurance law, accounting, risk management and ethics. Some of the better known designations that demonstrate a commitment to professional service include certified insurance counselor (CIC), chartered property-casualty underwriter (CPCU) and associate in risk management (ARM).
The company resources available to meet your business needs will vary depending on the entities your particular agent represents. Based on the companies with which they work, there are three types of agents available to work with self-storage owners.
Captive agents represent one company only. Allstate, Farmers and State Farm are examples of companies that sell insurance through captive agents. For some business owners, they may be the best choice, as the insurance companies they represent are often large and financially strong. They usually do an excellent job meeting personal and small-business needs.
Captive agents can usually cover all your insurance needs, but are limited to a single company's resources. While the company generally will not have insurance programs or departments specialized for self-storage, it may have developed separate endorsements for sale-and-disposal and customers' goods legal-liability risk exposures. Captive agents will not be able to offer you much choice in price or coverage, but they tend to represent strong, stable firms.
Independent agents and brokers can represent many insurance companies. In some cases, the company with the best product or price for your personal insurance needs will not be the best one for your business insurance. You may find your requirements are best met by several companies that offer different coverages, i.e., workers' compensation, commercial auto, property and liability, etc.
Independent agents vary greatly in the number of companies they represent. If your operation is large and complex or you manage more than one type of business, you may want to seek out a larger agency that will have the broadest choice of products and enough experienced staff to help you analyze and guard against different exposures. If yours is a smaller, simpler operation, you may be better off with a local agent, familiar with your area, who will be informal and easy with whom to work.
If you want one person to handle all your personal and commercial insurance needs, a captive or independent agent should be able to help. However, if your primary concern is insuring your self-storage operation, specific policies have been developed to cover the risks unique to the industry and its customers. They are typically underwritten and sold through general agencies.
A general agency is granted full authority to underwrite and issue industry-specific insurance policies and adjust claims on behalf of other companies. Examples include Universal Insurance Facilities Ltd., MiniCo Inc. and Deans & Homer. While general agencies sell insurance through licensed independent brokers, they may have their own fully licensed staff who can work with you directly on your self-storage insurance program. Maybe you have a good relationship with a captive or independent agent who provides good service, products and advice for your general insurance, but who isn't familiar enough with the unusual risks of self-storage to address your particular business needs. A general agency can be the answer.
It may seem I've overlooked something important: This article titled “Getting the Most for Your Insurance Dollar” talks so little about price! Of course, the cost of insurance is significant and, even with good service, a product sometimes can be unaffordable. But when in comes to insurance, service is worth a lot, and bad advice can be very expensive. Taking time to find the right insurance company is the best way to get the most for your money.
Scott Lancaster started his insurance career in 1976 as a licensed insurance agent and broker in California. He is now the regulatory compliance officer for Deans & Homer, where he joined as a commercial lines property and casualty underwriter in 1985 and has worked in the self-storage division since 1993. Deans & Homer has been providing insurance products designed to respond to the unique risks of the self-storage industry since 1974. For more information, call 800.847.9999 or visit www.self-storage-insurance.com.