Specialist vs. generalist

When you are interviewing an insurance advisor for your family, I think the first question should be whether you want an insurance generalist or an insurance specialist.  There’s no “right” answer, but I think there is a difference.

On the one hand, a generalist could handle a whole basket of insurance needs, like those for your homes, cars, liability, life, disability, annuities, health, business, travel, professional liability, non-profit, etc.  A one-stop shop, if you will.

On the other hand, a specialist can get you exactly what you need and nothing more. That’s because they’re an expert at one thing.  And an expert knows more than a generalist, by definition.  An expert has more power and influence with insurance companies, too.  An expert has no Plan B, so they’re all-in with whatever you need them for which might be necessary when something really bad happens.  And lastly, an expert has no distractions or divided attentions so they’ve got nothing else to do but practice their craft for your benefit.

We’re proud to claim to be experts at one thing – protecting personal wealth against unfortunate events, lawsuits, and unscrupulous people.  We believe consumers are treated better and get better results when an expert is on the case.

Photo: Rachael McGraw, Snow Lake, WA

Annual list of insurance Red Flags

Each year we post a list of the most common factors that give rise to errors in personal insurance portfolios.  These are listed in no order of frequency.

  • Assets held in Trusts/LLCs
  • Strong net worth with no (or not enough) liability protection
  • Special-value asset collections (jewelry, art, wine, collectibles)
  • Domestic employees (nannies, gardeners)
  • Home remodeling projects
  • Home-based businesses or employment
  • Boats & motorized toys
  • Young drivers and dependent children away at college
  • Volunteer activities at non-profits
  • Multiple residences
  • Short-term rental homes (VRBO, Air bnb)
  • Classic cars
  • Company car custodians
  • Older homes
  • Low deductibles
  • Closely-held corporations or business owners contemplating the sale of their business
  • Vacations taken outside of the U.S. or Canada

Seriously, I’m an optimist.

I’m actually a very positive, optimistic person.  It may seem otherwise with these posts, but they’re the result of now realizing I have 25 years of pent-up frustration with my industry.

I’m frustrated at how insurance companies generally treat their customers as if they’re doing them a favor.  I’m frustrated that the insurance industry itself has intentionally dumbed-down its professionalism in the way it advertises itself.  I’m frustrated that so many agents are lazy and don’t invent.  I’m frustrated that consumers choose their insurance so poorly, usually based on bad info and applying bad criteria.

There’s another story to be told, however, and I intend to tell it to whomever wants to listen.  Insurance does regularly stop financial ruin.  Thank goodness.  And for as much as I usually implicate insurance companies as to why most folks find insurance so soul-sucking, the remedy toward a better experience doesn’t lie with them.  The solution is to consider it important enough in your life to interview and find an expert who shows genuine dedication to knowing what they’re talking about, demonstrates passion about engineering the best solution for you, and then has the gravitas to get things done as they need to be.  And then I’d expect good results will follow.

Photo: Rachael McGraw, Amsterdam, The Netherlands

7 better questions for consumers

One of the best ways to improve your skill as a consumer is to improve your line of questioning.  Insurance companies are great at data collection and they know more about how you’ll make your next buying decision than you do.  That’s why they invest hundreds of millions of dollars advertising in the way they think you’re most likely to be manipulated.

So instead of you giving them what they want (consumers who are lead to believe that unimportant things are important, usually), demand that they give you what you want by teaching them the questions you expect them to answer.  Some suggestions to ask of your agent (if you don’t have an agent, interview some and get one):

  1. How will you decide which insurance company you’ll recommend to me?
  2. What’s the most compelling reason why I should do business with you?
  3. How would you rank the insurance priorities in my portfolio?
  4. In describing “good service”, what does that mean to you?
  5. With the insurance company you’re recommending, do you anticipate a gap between how I’ll expect my claim to be handled and the way it will actually be handled?
  6. Which insurance company is most likely to act consumer-focused?
  7. Which insurance company employs the smartest employees?

Death of the (lazy) middleman, please

A recent online business journal’s headline: The Death of the Middleman.  Maybe so when what’s available for sale and what is wanted by the consumer is obviously, easily, and profitably matched.  I don’t think we’re there yet with risk management and insurance.

On Monday I told a family what I thought they needed in order to be financially protected. On Tuesday I listened to an insurance company tell me what they’d require from that family in order to qualify for their insurance.  The two didn’t match.  So I’ve got a willing consumer who needs X and an unwilling insurance company who will only provide Y.

That happens a lot.  And what also happens a lot in response to that, unfortunately, are agents who a) give up looking for creative solutions, or b) don’t tell the truth and try to sneak an insurance company into providing insurance they don’t want (you can imagine this doesn’t work well if a claim occurs, by the way).  So there are a whole bunch of families out there with bad insurance because too few agents are willing to go find improved solutions.

And on the other side, insurance companies keep lopping off the ends of what counts as “good business” in their eyes.  They keep slicing thinner and thinner what defines an acceptable client with things like pricing algorithms, “no-more-than” guidelines, and “only-if” scenarios.

That’s fine – it’s their business.  But my business is showing how a good middleman is valuable.  Insurance companies are governed by boundaries and generally limited thinking and being a middleman able to find the differences among them can make a difference between “you’re covered” and “nope, sorry”.

Your bad claim experience begins now

One of the most frustrating moments in my job are the times when I hear of a family suffering an insurance loss and then realizing that the claim-handling experience with the insurance company didn’t match their expectation of how they wanted to be treated.

The reason it’s difficult is because I’ve got to think of a diplomatic way of saying that the bad experience is probably because there was a moment years prior where they decided to pursue an insurance company based on cost or some other reason unrelated to pursuing the best fit for them.  It’s my belief that a bad claim experience actually begins the moment you buy the wrong insurance from the wrong insurance company through the wrong agent (or buy it direct because you thought you could).  It just may take awhile to show up.

Insurance. Is. Not. A. Commodity.  Among the insurance-purchasing factors there are differences in needs, differences in pricing, differences in coverages, differences in claims handling, differences in client appreciation, and differences in talent and experience.