Myth No. 3
Use the same broker your family has always used
Insurance—whether home, auto, disability or otherwise—is a commodity, and products vary little from one provider to another.
This consistency is mandated by state law. The difference between customers' experience lies in the quality of the insurtance
personnel at every level of service. So why pick an insurer, a broker or a policy based on one family's experience?
Insurance can be an enormously lucrative business, particularly for family agencies in business for more than one generation.
Every time a policy is renewed, the brokerage receives a commission. If that commission becomes an entitlement—when a customer
always renews the coverage and always has—the incentive for the broker or agent is minimal for providing service. The agency
can spend its time looking for new business.
Imagine if you developed a good relationship with a client and after the first few pets, you were allowed to just mail them
a syringe and vaccine vials so they could administer their own shots—and you'd still get the full exam fee. You could vacation
in the islands more often and upon returning to your office, you could spend more time cultivating new clients.
That's what's happening when a policyholder receives a renewal invoice, writes a check and mails it to the insurance company.
The broker and agent did nothing, yet they still get the commission.
So how do you find an insurance professional who will review your policy without being asked, suggest increases or decreases
in coverage as your life changes and, in a word, work for the commission? Simple. You do it the same way you pick a restaurant,
a snow blower or a new car: You get recommendations from friends, relatives and business associates.
Is it worth the effort? Let me take off my lawyer and doctor hats and don my favorite hat: my hot-rodder/car collector hat.
You see, I get traffic tickets and hit things with my cars fairly often so I know a thing or two about making claims on auto
policies. Consider two of my very true, very personal experiences.
July 2002: I forget to set the emergency brake on the 1970 Plymouth Barracuda Convertible I had bought the day before. The car backs
itself out of my garage and crashes with enormous body damage. I had contacted my insurance agent the moment I purchased the
vehicle at a car show before even pulling it into my trailer.
After the accident I called that agent to make a claim, and he was embarrassed to report that he'd never gotten around to
covering the new vehicle and, therefore, I was on my own to see to the repairs. Considering that the repairs on a vintage
car can cost more than the price of a brand-new car, I was livid but not satisfied with the agent's answer. I read the policy
covering my other old cars and discovered two things: 1) 30 days of automatic coverage on newly acquired vehicles and 2) my
agent was a moron for not knowing that fact.
I bypassed the agent and made the claim to the insurer of my other cars. The company questioned every part and procedure the
restoration company used to bring the car back to show quality. The experience was a nightmare for me and my body man.
October 2010: I was speeding merrily along Interstate 88 on my way to Albany and a deer jumped out of the woods and bounced off the hood
of my 1967 GTO convertible. My seatbelt kept me from any serious injury, but the deer left my Pontiac with its headlights
sitting on the dashboard.
After my 2002 insurance fiasco, I had shopped insurers aggressively and switched my cars to a far-less-expensive company with
a far better claims record. But you never know about a company until the true test: a major claim.
My new insurer did great for me! The restoration company sent an estimate of about $30,000. The insurer sent an adjuster to
the shop, and he approved every single part and procedure. The company even paid extra to replace some sheet metal with vintage
parts that cost more than reproductions. The body man and I were both amazed. And this company charges substantially lower premiums than my previous carrier's.
Look critically at insurance agents and policies. Don't end up like my good friend whose practice was damaged in a recent
flood. His agent told him he was "all set" with flood coverage after the last one three years ago.
After this year's flood, he was all set all right—all set to pay entirely out-of-pocket for his prescription food inventory,
pharmacy inventory, radiography machine and ultrasound machine. None of those were included in doc's "building contents" coverage.
Can you say "broker malpractice?"
Dr. Allen is president of the Associates in Veterinary Law P.C., which provides legal and consulting services to veterinarians.
Call (607) 754-1510 or email firstname.lastname@example.org
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