In 2000, I moved my family’s homeowners and car insurance policies to a large insurance company who has captive agents, agents that sell this particular company’s policies. The relationship started as many have - we met a nice guy, who happened to be an insurance agent, at the baseball field where our boys played Little League together.
We started with two homes and three cars insured with them, but later added a motorcycle and other “toys”. As our sons got older, we added another car and teenage drivers to our policy - that was eye-opening! Of course our premiums increased, but our agent, Rick, communicated everything to us effectively, as he always did.
Over the years, we bought and sold our homes and purchased an umbrella policy - always staying loyal to our agent and his company. We paid thousands of dollars each year for peace of mind because Rick and his team were knowledgeable, responsive and always available when we needed them. We only had a minor claim or two - nothing substantial, and the company made good on their promises and paid our claims in a timely manner. Our insurance experience with this company had been positive.
Then one morning, I logged onto their website to check the details of a policy. While there, it hit me. We now had eight policies with this company, and we had been on autopilot for our renewals for over ten years. When I calculated the total premium costs, I gasped - it was time to confirm we weren’t paying more than we should be for these plans!
Despite being an insurance professional, it took me several hours to organize the deductibles, limits, exclusions, etc. on all of the policies. The next step was to decide which other insurance companies I wanted to consider. I couldn’t find a reliable source for this information. Most websites I visited were clearly compensated for promoting certain companies over others, and I wasn’t falling for that! So, I did what most people do in this case - I talked to family and friends.
Ultimately, I compiled a list of four companies who had been highly recommended. It was a time-consuming process, but after what seemed like a full weeks worth of time, I obtained quotes from each of the companies, including my latest renewal from the company I was already insured with. Then the fun began - I had to review each offer and compare them to what I already had. Of course, each company uses their own terminology and each has their own underwriting requirements. But the most shocking comparison was when I got to the bottom line - price. The difference between my latest renewals and the lowest new quote I received from another large, well-known company was $3,500 per year!
I called Rick and asked him how this could be, giving him (and his company) the benefit of the doubt because I was a loyal customer. His response shocked and frustrated me. Rick said that my family, with all of our insured items - homes, cars, and toys, was an ideal customer for this other company. Given our demographics and risk profile, we were a perfect target for them. Clearly, they wanted our business more than the company we had been with for over ten years!
We switched, and while we don’t have the same relationship with our current agent that we did with Rick, we are happy with the service so far. The key lessons I learned in this process are complacency is costly, assuming our loyalty was going to benefit us in the end was false, and the process of finding alternatives to current coverage is daunting!
I won’t make this mistake again - I will “check the market” every few years to ensure we are paying a fair price for the coverages we have. Fortunately, now there’s a new source for policyholder feedback from other consumers available online. This is one of the reasons why I am proud to work at Clearsurance.