“So you’re the middleman?” This is a question I hear sometimes when I network at events and explain how Bridge First Insurance and our team of independent insurance agents are different from your typical insurance agency. It’s true that we are the connection between clients and the insurance companies we represent. Our position is to represent the insurance provider to the client and often times, negotiate quotes with the insurance company on behalf of the client, but we are not middlemen. A middleman tends to be more expensive and takes a cut off the top. However, an independent insurance agent doesn’t cost more and wants to help keep your costs low. A good independent insurance agent will help you find the best car insurance, not the cheapest car insurance.
Our biggest advantage in insurance sales is options. The average person will look at two, maybe three, different companies when they are looking for quotes on their auto, home, life, or business insurance. As an independent insurance agent or insurance broker we have more options. Insurance agents break into two groups- captive agents and independent agents. Captive agents are associated with one company and they can only quote the company they represent. An independent agent, like the team at Bridge First Insurance, is the second type of agent. Independent agents are not directly associated with one company. Instead, they represent multiple companies. This provides a huge advantage when providing quotes because we can look for a company that is going to look at your situation most favorably. For example, a client with no tickets and/or claims is a great fit for Erie Insurance. A client with a good driving record is going to get the best car insurance with Erie. Clients who’ve had some rough luck lately and had a couple of claims would be a better fit with Progressive Insurance. We will typically run 4-10 quotes for our client in search of the best pricing, which allows us to provide the best coverage for each client’s needs. Most insurance agents receive a small commission that is a percentage of the annual premium. Most agents then receive a residual or continuous commission for each year that client stays with that insurance company. In order to make money in this business we want clients to stay with us for years to come. We would much rather provide you with a lower premium now and keep you as a client for years than make a couple of extra dollars up front and lose you the following year.
“Jack, what about companies that don’t have agents at all? Surely insurance agents and insurance brokers as a whole are more expensive than shopping directly online?” This is a myth. Insurance companies that don’t have agents don’t have anyone spreading the word. They typically spend a significant amount of money marketing. A lot more than what an agent makes on a policy. I always find it interesting when I see commercials about new and exciting technological ways that their insurance company is saving you money, all the while spending $50,000 running that commercial. In fact, after spending money on a few commercials, they will have spent more than they would have paid the agent that year.
Additionally, their retention and ability to keep clients is lower. Clients that don’t have a face, name, and voice to their coverage have a lower customer service experience. Need to make a change, ask a question, or need advice on a potential claim? Well, be prepared to press 1 now, then presses 3, then 5, wait no, you meant to press 1- start all over again.
How Insurance Works
Insurance is a unique product. Insurance companies don’t know how much it truly costs until the year is over. They don’t know who is going to file a claim, or when, and how much, it is going to cost. Insurance is a competitive business and margins are paper thin. Companies rely on insurance brokers and agents to write clients who will be profitable for the insurance company. If everyone ends up filing claims, the insurance company wouldn’t be around long. When insurance companies aren’t profitable they have to increase their pricing to make up for it. Have you ever been with an insurance company, didn’t file a claim, and still have your price increase the next year? This could be due to the insurance company not being profitable. The insurance agent could be to blame for writing clients that don’t fit the company’s profile to be profitable. A good agent helps keep prices low for their clients by charging the right price for everyone and help keep the company profitable. The last thing you want is to be a great client who didn’t file a claim and still have your price increase because you need to help pick up the slack for other people.
How about a circumstance where there is a small amount of damage? Sometimes accidents are unavoidable, making claims unavoidable. There are also circumstances where you could avoid making a claim. Your independent agent is a great point of contact. They can advise you before you talk to the actual insurance company. There have been situations where we have helped people save money in the long run by not filing a claim. Remember that an insurance company will price more favorably for clients that haven’t filed a claim versus a client who has filed a claim. If the claim pay is going to be minimal, the client may be better off not filing a claim and keeping their annual premium lower rather than risk an increase when their policy renews. These situations are delicate and the client needs an insurance agent to help advise them on what to do.
The more knowledgeable you are about your insurance, the more you can save. By simply having a conversation with someone, I can usually tell which insurance providers are going to provide him or her a competitive quote. My clients would likely spend hours looking for an insurance match when I can tell them before I even run the quote. Our goal is to create a knowledgeable client, not make insurance sales. The insurance will sell itself once the client understands their coverage needs. For example, I know when I have a client that comes to me that previously bought their policy online probably doesn’t have sufficient coverage for the market they’re in. The online system spit out a low coverage policy for the lowest price they could offer or they let you name your price and gave you whatever coverage they could for that price. The coverage that is right for each client is different. The right coverage always gets you the best car insurance deal. I hate hearing that people had to find out the hard way and that the wrong coverage ended up being way more expensive that paying a few extra dollars each month to avoid thousands of dollars coming out of pocket.
Statistics show that more and more people shop online for insurance every year. Clients that are researching competitive pricing and coverage are ideal. I will take a knowledgeable client over one that just wants the lowest possible price any day. Statistics also show that most of the people who shop online still purchase through an agent. Why? Because people still value the human touch. People still want someone to go over the coverage with them when they are making legal decisions that are $1,000,000 decisions in some cases. Your insurance is worth a conversation and when an agent doesn’t cost you a dollar more why wouldn’t you use an insurance broker or agent?
Speak with a Bridge First Insurance Agent today! (571) 249-3857
Previously on the Blog:
Jack has achieved success in the insurance industry through a consultative and honest approach to clients. He designed this approach around educating clients on important coverage and allowing them to decide what policy would best fit their insurance needs. In 2013, Jack and co-founder Dave Zappacosta, established Bridge First Insurance, as an independent insurance agency operating in Virginia, DC, and Maryland.