Building Trust With Clients Amidst Insurance Scams

Yesterday I had an appointment with a client that has been with me for years.  Halfway through our annual renewal meeting, the CEO told me a horror story about how after twenty years with his personal lines broker, he decided to shop around.  He received a mailer from what seemed to be a legit operation.  He even went to the insurance broker's office.  Everything seemed to check out just fine.

My client did all the right things.  He even consulted with his current agent on the quote the other agent had provided.
His agent of twenty years couldn't come close to the other agents rates and my client ended up going with the new, unknown agent.  Now fast forward three months.  My client could no longer get a hold of the agent and hadn't received his policies.  My client knew something was wrong, filed a complaint with the Department of Insurance and found out that this guy had been scamming many people in the same area.  The twenty year veteran agent took my client back with open arms.  In my meeting with my client he vowed never to leave his personal lines agent because you can't put a price on "trust and honesty".  

And then it hit me, how do I continue to build trust among my clients and prospects when our industry is riddled with scams?  It's always disheartening knowing that opportunists and criminals step up their scamming games after a natural disaster or catastrophe.  They kick people when they're down and in turn, the legitimate, hard working, trustworthy brokers and agents end up getting rolled into this bad wrap.   

A few disciplined practices have given me a leg up on fraudulent insurance brokers.  Here are a few that I find are most important to my clients:

1. BE RESPONSIVE.  Put yourself in your clients shoes.  If you didn't receive a call back from a trusted advisor or consultant within 24-48 hours, would your trust begin to waiver?  Even if I don't have an answer for one of my clients, I still respond and acknowledge I received their message.  Once I look into the issue for my client, I always try and give them a timeline of when this should be resolved by or when we should be receiving the answer.
2. BE PREPARED.  When a client calls for a meeting or asks if you have time to chat in the afternoon, be inquisitive.  Finding out a little more information goes a long way.  It shows my clients that I care about their needs when I prepare ahead of time and answer most if not all of their questions.
3. BE DEPENDABLE.  In short, do what you say you're going to do.  If you say you will call or get an issue taken care of, do it.  Your client will rest easier and build up rapport with you much faster this way.  

My client was right.  You can't put a price on trust and honesty.  

Less Clients, More Service

'Tis the season for being thankful!  And this season I am absolutely thankful for my each and every one of my clients.  They make my day colorful with emails and phone calls.  But the true test is actually being able to be there for a client when accidents or claims do occur.

Late last night I received an email from a client that one
of their properties had been damaged severely from the storm this past weekend.  I was able to respond to them immediately, via my trusty iPhone, and give my client a call first thing this morning to hop on the claim.  In this particular case my client owns an entire block of town homes and there were quite a few town homes that suffered severe water damage due to the storm. Not only was the owner and property manager worried about the damage, but also wanted to put their tenants at ease that this big mess would be taken care of.  

How inconvenient to have to deal with a storm right before the holidays???  Imagine presents, etc., on the floor around the tree that are soaked while you're out running errands.  Not a fun way to come home.  In cases like this, it's my job to make sure things are followed up on and processed accordingly.  I spoke with the owner and the property manager this morning.  I also filed the claim on behalf of the insured to make sure that an adjuster would be assigned to the claim right away.  Now, is it my duty to file the claim on behalf of the insured?  No.  But do I feel better making sure it is filed and being handled properly because of this?  Absolutely.  

Sometimes brokers take the easy way out and redirect insured's to call a 1-800 claims number.  While this may be the most "efficient" way of handling a claim since there is no longer a middle man, it's definitely not the most personal to handle a claim.  Claims are extremely sensitive.  Someone's property is damaged, or in the worst case, someone's injured.  As a broker it's my responsibility to take time out of my day and make sure my clients are O.K.  That is the least I can do when a claim occurs.  If your current broker isn't taking the time to make sure your business is O.K. when a claim occurs, maybe it's time to start thinking about finding someone who has less clients and is more concerned with their clients well-being than their bottom line.

That Will NEVER Happen to My Company!

I can't count how many times I've sat down with C.E.O.'s, V.P.'s and C.F.O.'s for them to tell me that a specific claim instance would never happen to them.  Well, news flash...it has happened to some of my clients!  And no matter how many controls, safety measures and positive company cultures you may boast, it can happen to your company.   Recently we stressed the importance to a company for crime coverage.  The owner was adamant that this would never happen to his company.  He denied the coverage and he is now dealing with over a $350,000 financial loss due to an employee stealing from the company.


As an insurance advisor, it is my job to tell you about all the things that can happen and prepare the business for financial hardship or simple inconvenience in wake of a claim.  Are some instances scary and turn into disasters?  Yes.  Is that every claim?  No.  You definitely don't have to over-insure in every instance.  I am not a fan of spending money carelessly.  But don't go the ignorant route and assume that claims you hear about on television or in the news could never happen to your company.


When I am developing an insurance program for my insured's, one of my client's primary concerns is the deductible or self insured retention amount.  As this should be a concern, some of the less experienced clients tend to associate the deductible, whether high or low, with the premium amount.  The higher the deductible the lower the premium dips.  The lower the deductible, the higher the premium rises.

As a rule of thumb, is this correct?  For the most part yes.  However, what does it mean to take on a bigger deductible vs. a smaller one?  Some business owners only care about the bottom line and never think that anything will ever happen to their business.  These are the businesses that are O.K. with taking a bigger deductible or S.I.R. risk, even if it isn't the smartest thing to do on the books.

My advice is to seriously evaluate financially what your company can afford in case of a claim where a deductible or S.I.R. needs to be paid.  Whether that be a $2,500 deductible or a $50,000 S.I.R., pay attention to these key insurance factors and not just the bottom line.  Is this deductible per claim or per occurrence?  A per claim deductible could mean you are paying out multiple deductibles for one particular event or loss which could add up quickly.

Have more questions or just want a second opinion?  Feel free to email me for aninsurance evaluation for your own business at joileneh@dbinsurance.com.

Cheating on Your Audit and How it Doesn't Pay Off

Insurance carriers are surely cracking down on clients withholding payroll or gross revenue information.  One of the most repeated complaints I hear from prospects or new clients is that they always get a pesky audit bill at the end of the insurance term.  And, let's be honest.  It's never a good time to pay a large chunk of money to an insurance company.  But if you lie when reporting your revenue or payroll, be prepared to get caught. 

These past few years, projections have been tough to predict.  We've seen clients down size drastically, from 200 employees to 20.  We've experienced clients going out of business with hopes of re-opening their doors again in a better economy.  And we've witnessed companies joining forces to make sure they can weather the storm.  The economy took a giant leap off a cliff and, hopefully, we're slowly but surely climbing our way back to the top.

With all the economic pressures, it's never fun to also deal with an audit from your insurance company.  So here are a few tips to help make sure you don't get that HUGE bill at the end of your insurance term:

• Don't try and cheat the system.  Seriously.  Use accurate numbers at the end of the term and report properly.  Pull your reports directly from your payroll software or payroll company.  This will assure the insurance company that there is no funny business going on.  Some insured's have tried to skim their numbers only to be faced with criminal charges down the line.  And, I can guarantee you, those charges and defense costs were MUCH more then any audit they ever received. 

• Ask your insurance broker to perform a mid-term audit on your books.  Checking in with you about 6 months into your insurance term is a good rule of thumb.  Your broker should be comparing your current numbers (payroll and/or gross revenue) to the projection listed on your insurance policy.  This will prevent any major audit bills from crossing your desk at expiration.  If the numbers are up, you may want to think about reporting that to the insurance company midterm so that payments can be spread out over time.

• Attempt to negotiate.  If you've been a loyal client with an insurance company for years, ask your broker to see if there's anything they can do to lower your audit bill.  It never hurts to ask.  If the insurance company isn't willing to lower the audit bill, see if you can get a payment plan going for the audit if necessary.  

Most importantly, make sure you keep the lines of communication open with your broker to assure you don't have a surprise audit at the end of your insurance term!