Insurance, whether commercial or personal in nature, is a very sensitive topic. It is something that people often do not like talking about because it infers there is a possibility that something bad may happen to them and/or their business. This is exactly what makes insurance so important to talk about and why you should only be doing business with someone that you completely trust and that you know is looking out for your best interest. In my time in the insurance business I have seen a number of horror stories where someone’s broker seemed to be doing everything in their client’s best interest, but in reality was lying to and stealing from them. Situations like this can not only cost you the thousands of dollars stolen by your broker, but can also put you at risk of not being properly insured. The following is a list of red flags to look out for in your dealings with your insurance agent that I have seen throughout my career as a broker:
- Your broker does not use, or sometimes even have, his own email address. In some cases they will even have someone else in their office contact the client in lieu of themselves. This is often another service employee at the company. No professional in the year 2017 should be without an email. There is no excuse for it, and it should be an immediate red flag if you do not have an email address for your insurance broker. The only kind of person doing business without an email address is a kind of person that does not want to leave a paper trail of lies left behind on their computer.
- Your broker does not provide you with copies of your insurance policies at any point during the policy period. The whole point of an insurance policy is to protect your company and its assets from financial loss. How can you be sure that your policy will do that if you haven’t seen it? An insurance policy will list everything from the premium you paid for it to what exactly it covers. If your broker is not providing you with copies of your policies then he or she may be acting dishonestly in regards to the soundness of your policy or even the premium they are charging you for it, which brings me to my next red flag.
- You are not receiving actual bills for your insurance premiums. There are two main forms of billing when you purchase an insurance policy: agency bill, and direct bill. Direct bill means that you, the insured, will receive a bill directly from the insurance company. You would pay the insurance company, who would then pay the broker their commissions. Agency bill means that you, the insured, must pay your insurance brokerage the premium due, and the insurance company then pays the insurance company those premiums, less their commission. With agency bill you can either pay the premium in full, finance the premium through a finance company to make multiple payments or in some cases the Agency will bill you on a scheduled basis that is agreed to in advance. If you are not receiving official bills directly from the insurance company, the finance company, or your insurance broker, this may be a red flag. Your broker should not be calling you on the phone and telling you how much to write his next check out for. You should be receiving real bills, otherwise how could you be sure that you’re paying the correct amounts? The most common excuse I have heard brokers give their clients to avoid sending them real bills would be the broker claiming that they are “doing this to help you out because you don’t want to deal with all of this kind of stuff.” Total BS. This is your hard earned money. You should trust nobody.
- Your bills from your broker are typically for round numbers. Have you ever seen an insurance premium? If you have then you may already know that they are rarely a pretty number like $10,000. Insurance premiums are typically ugly numbers like $10,931.09. the total premium is typically made oup of the policy premium plus any fancy fees the insurance company throws on there. If you are receiving monthly bills for rounded numbers I would call your company to have them tell you your true payments right away, as your broker may be overcharging you and taking money right off the top.
I have seen horror stories that have ended relationships of more than 30 years. You can always trust someone until you can’t. Greed can get the better of anyone.
In order to be sure that you know exactly what you should be receiving form your broker, I have made the following list:
- A copy of the quote before binding coverage, which you are often required to sign. This should list the premium, coverages, and the forms attached to the policy.
- A copy of each of your insurance policies, which you should keep on file.
- You should be receiving a bill regularly from either your insurance broker, the insurance company, or the finance company for an amount that is reflected on your policy and/or finance agreement.
- If the policy is financed you should have been required to sign a finance agreement.
- If your broker charges fees they should be listed on the finance agreement. If they are not, then you should speak to your broker and consider terminating the relationship.
I hope this helped give you some useful information for protecting yourself against the greed of others. If you feel that you are involved with someone who is exhibiting some of these behaviors please give us a call. We would be more than happy to help you!