“Price is what you pay. Value is what you get.” – Warren Buffett
Everyone likes a good price. Most of us need to manage limited resources and want to get decent mileage out of our money. Purchases with a larger price tag naturally demand our attention – and insurance is one of these items.
As insurance brokers, we’re used to certain questions: “What’s the cheapest quote for my car?” or, “Why does your policy cost more than the other guy’s?” These questions are perfectly fair, but insurance buyers risk losing control of their outcome when price becomes the sole deciding factor.
Remember: insurance is not a product. Products are items with few differences between them which can usually satisfy their intended purpose regardless of where they came from or how much they cost. By comparison, insurance is better thought of as a service: services vary widely between providers who will offer as much or as little as they wish, in exchange for their own individual prices.
Insurance buyers are understandably tempted to take the path of least resistance when faced with the wide range of insurance coverage and service options offered by multiple insurance companies. This leads to decisions based solely upon price, but it doesn’t have to happen: an independent insurance broker can provide great value in the gap between insurance companies and customers.
- We do this every day: insurance brokers work with a range of insurers and have experience with a variety of different insurance policies. By getting to know our clients, we determine what will be of the greatest value to them in the event of a claim and propose coverage that matches those expectations – at a competitive premium.“Competitive” does not always mean “the cheapest,” but we do strive to find coverage options that will meet our clients’ expectations at a fair and reasonable premium point.
- Using a broker is not more expensive: it is commonly believed that “cutting out the middleman” results in savings for the customer. This is not necessarily true: in Alberta, the person selling insurance to a consumer must be a licensed insurance agent. A company selling insurance directly to the public has not eliminated the expense of that salesperson – they’ve just moved it in-house. Furthermore, that person can only sell policies available from their one insurer. They do not have the ability to select from a wide range of options in order to secure the best possible fit for your individual situation. Even if the price seems right, the product may not be – and they have no day-to-day experience with other competing products which might be a better solution for you.
Your choice of insurance has serious financial implications. Thorough and informed decisions must be made in order to place the right coverage with the right insurance company – at the right price.