Policy Issues: "Things your agent won't tell you"? Don't tempt me!

It seems every month or two I come across some consumer publication with an article titled, "What Your Insurance Agent Doesn't Want You to Know," or "Top 10 Things Your Insurance Agent Won't Tell You." (Here's one I'd like to see but never will: Your numbskull 16-year-old is too irresponsible to be allowed behind the wheel of two tons of steel, it's probably your fault, and insurance can't fix that.)

Invariably these "insider secrets" involve such startling revelations as "carry a higher deductible to save money" and "be sure to ask for extended replacement cost on your home." Oh, and be sure to shop around, since no insurance person will ever clue you in to that little-known way of getting the best deal. Gee, makes you wonder how they missed all those cavemen, gecko and "1-800-auto-pro" commercials. Shop around to see if there's a better price--well, duh. Did the publisher get to yell "Stop the presses!" when someone came up with that one?
Basically, these "consumer advocates" are just playing games, purporting to know more than they do, and selling their "secrets" to the unsuspecting public. But if it's games they want, then games they shall have. In this month of the Summer Olympiad, let the competition be joined! Herewith, as a public service to consumers everywhere, is my suggested list of "Six Things Your Insurance Agent Should Have Told You"!
1. You're an idiot.
Oh, and I mean that in the best possible way. Not that you're stupid--no doubt you're an intelligent human being with many fine attributes. But dare I suggest that none of them involve a comprehensive understanding of the complexities of property-casualty insurance?
Trust me, there's a reason I've tried not to sleep through more continuing education classes on this stuff than you can imagine in your worst nightmares. I have literally forgotten more than you'll ever know. So why don't we just agree that you'll stick to your part of the deal--telling me what you're most afraid of losing or what you fear will cause that loss--and leave the coverage solutions to me? Which leads me to my next suggestion.
2. It's your stuff. You tell me what it's worth!
Look, my expertise is on the technical side. What policies are available, at what price, and what each does and doesn't cover--that's my thing. Please note that nothing in my area of expertise suggests I know thing one about property appraisals. So why don't we just forgo the dance and you tell me how much money will make you happy if you suffer a total loss, and we'll just run from there, 'kay?
By the way, I'll also be asking you to sign a waiver stating that all the valuation numbers are yours, and I admit up front I'll accept whatever you say. It's your stuff and your money, so fish or cut bait at whatever level you desire. If you need help, feel free to consult whatever valuation expert best meets your needs: housing contractor, jeweler, auto dealer or that antique show on PBS. And yes, if you want all of it fully replaced, repaired or rebuilt, you're going to have to insure it to the full "worst-case scenario" value, which, at least for your buildings, is probably going to be significantly higher than the current replacement cost. Which means it may cost you a bit more than you wish to pay. So it goes. That's how it works.
3. If you want to lower your price, don't lower your coverage--raise your deductible.
OK, so the crusading consumer reporter partially got one right. It's never a good tradeoff to cut corners on coverage, only to find at claims time you're going to fall far short of what you need. Here's some "insider knowledge" for you: The best time to have good insurance is when you actually need good insurance. Cutting your limits to lower your premiums is a sucker's bet. Far better to lock in your out-of-pocket costs on the bottom end than to risk a massive loss on the high side. Worst-case scenarios do happen. Don't make me tell you "I told you so" later, because I will. (Actually, I won't, because mother taught me that's rude--but I'll sure want to!)
Sure, you might pay a few minor losses instead of claiming them on your policies, but you and I both know two things: First, the best use of your coverage is for the catastrophic losses you can't afford on your own; and second, no insurance company is going to be thrilled if you turn in a bunch of nickel-and-dime claims anyway. So let's get you catastrophic protection at a better price and let the carrier have a better client at a lower risk. Can you say win-win? Now, want to go for a win-win-win?
4. Let me handle all your insurance or none of it.
What's the point in spreading your coverage around multiple agents? Sharing the wealth? Well, as the Who sang, "I can see for miles and miles!" Translation: I've been in this business long enough to know that while folks may think they're saving a few bucks by purchasing policies from different providers, it's shortsighted thinking that comes back to haunt them at claims time.
One of the biggest sources of claims conflicts is the disconnect that arises between the various policies purchased by an insured. Should that claim be under the auto or homeowners? CGL or business auto? Does the umbrella properly coordinate with underlying coverages located with another provider? In most situations, the savings from slicing and dicing your account add up to pennies over having it all with one agency anyway. And if you really can save big bucks with the other guy, then let him take all of it. I'd rather have none of it than risk the gaps and E&O exposures from only having some of it. So, as the potential paramour in the famous Meat Loaf song sang, "What's it gonna be, boy?" All or nothing? And while you're pondering that decision, here's another:
5. If that's where you choose to live, then live with it!
There's a reason the government built that levee in your backyard. Did it occur to you before or after you saw a boat passing by above your head that your property lies in a flood plain? Although the government may grandly refer to such flood probabilities as a "500-year event," that simply means that at some point that area will flood. Less often than an area designated as a "300-year event," sure, but flood it will. So either buy the flood insurance, move, or accept the consequences and keep your mouth shut. Ditto for those in hurricane zones ("Isn't the Gulf view just lovely?"), earthquake areas ("Isn't the Pacific beautiful?") or forest fire locales ("Living in natural surroundings is so peaceful."). There's a price to pay for living in such locations, and it ain't just to the real estate agent.
And don't tell me you can't move. I've seen folks move across town or across the county to get their kids in better schools or to shave some time off a commute or because they don't like their neighbors. You can certainly consider a move if it saves you big insurance bucks, as well as lowering the chance of a major disaster loss to you and yours. And speaking of risking major disasters, try this one on for size.
6. Just keep knucklehead's car title in your name and on your policy.
As my May column discussed, I know there are any number of reasons why your attorney, close friend, brother-in-law or some other random twit thinks you're going to save money and lower your risk of getting sued if you do the opposite of what I just said above. Trust me, they're even bigger idiots about this stuff than you are.
When you signed up to be a parent, you shouldered the responsibility of that kid until death do you part or until they pack up and permanently leave home, assuming that day comes before the aforementioned death. So just suck it up, folks. If the kid is that bad a driver, you need those high limits on your policy protecting you anyway. And believe me, the premium may seem high now, but come the lawsuit it will seem a bargain indeed. If it helps, consider the additional insurance cost like college debt--an investment in your child's good start on the road to a brighter future.
That's it. Just six small agreements that I believe have the potential to revolutionize client-agent relationships forever! But don't let me limit your possibilities. Dare to dream! Feel free to add to my list and share your ideas with me. I'll be more than happy to pass on your expanded version in a future article.
But as for now, as they say in the Olympics, let the games begin!
Chris Amrhein is an insurance educator and speaker with more than 30 years in the industry. He is also chief fun officer of www.insuranceisfun.com, where his newest book of insurance musings, "Yes, Virginia, There Is Insurance," is now available. Readers may contact Chris at chris@insuranceisfun.com.