What’s fun about auctions? It’s the bidding! It’s the thrill of the chase and sometimes the victory of a win! Bidders drive the price up until they stop bidding and then the price is set. At an auction, it’s the bidding that makes it fun.
When you buy or sell a car, the final price is determined by the “bid” or offer. The offers are spread out on the table and the buyer and seller choose the one that best meets their needs. So, if bidding works when buying a car, why not when buying insurance?
On the surface, insurance can appear to be a commodity; a product that is easily bid out. Slogans like “Save 15% in 15 minutes” gives the impression that all insurance is the same except for the price. We’re bombarded with advertising offers that will save us money with this company or that one. Let’s face it, we would all love it if insurance was that easy. But insurance is not simple because your assets and exposures are not simple. This is why consumers depend so much on the trust they have in their broker to protect them.
Many businesses must provide bids to generate revenue for themselves and many of them tend to expect the same when it comes to their insurance. Take a machine shop or distributor who bids for work all day long. They may expect better insurance pricing if he goes out to bid. So why is it not the same when it comes to insurance?
In reality, the process of putting together a proper insurance plan is more like preparing a tax return than bidding a 10,000-piece run of widgets or 600 pounds of halibut. A good broker goes through a process that includes compiling historical information, classifying operations, and, with the help of the client, making projections of exposures and potential future risk. This important process protects the client from unanticipated, potentially devastating losses. Our clients’ perception and understanding of the difference between a bid for insurance and a proposal for insurance is mandatory.
A request to bid insurance is an opportunity to educate the prospect’s understanding from what is being said or sold to what is truly desired or needed. This is the essence of a professional broker – using our knowledge, experience and communication skills to help a client evolve and move past their existing perception of an insurance brokers value, to something much better and important!
The same thing applies when it comes to tire-kickers – people who are not intending to make a change but who are just curious about what else is out there. If they give us a few minutes of their undivided attention – we should take it. Here’s where we ask a few thoughtful questions and then paint a verbal picture of the enhanced or upgraded insurance world that is waiting for them if they worked with us.
A good broker will quickly uncover the client’s true needs and describe the advantages we bring, both monetarily and for their peace-of-mind.
Clients that are looking to bid at an auction are doing themselves a disservice. Having the opportunity to work with a broker will not only give them well thought-out coverage but also save premiums.
So, the next time someone asks for a bid on their insurance, we’ll start by asking what their best outcome would look like. Just as the tax-preparer will ask a lot of questions, the questions that insurance brokers’ ask will assure the client that the outcome will be accurate and provide coverage he needs and wants.