The True Cost of Low-Cost Insurance Carriers

By Ashley Rahall, Assistant Service Manager

At Beacon Hill Associates, we pride ourselves on providing the right coverage with the best service, but what about the cost of coverage? When an agent comes to us looking for coverage for a hard to place risk, we have experienced team members ready to take on the task. As an agent you must ask yourself: what is important, a cheap quote without the right coverage or paying a little more and getting all the bells and whistles? As with everything in life, you get what you pay for.

What matters most to you? Let’s say we have an agent looking for a quick turn-around at the last minute. We present two different carrier options. Carrier A is, more expensive but has the correct forms and limits the insured is asking for. Carrier B is cheaper than A, however the quote is missing forms and the limits are incorrect. It may be $10,000 cheaper with Carrier B than Carrier A, however Carrier B is not presenting the correct coverage and/or limits your insured is looking for. But time is running out and you decide to go with the cheaper option. What happens a few months down the line when a claim occurs and unfortunately the policy does not cover said claim. At this point, Carrier A would have been the better option. Cost or coverage, what matters most? Some agents think the only important part of a quote is price, however when your insured is stuck with a large claim, we quickly realize that going the cheaper route is not always the correct one. Our duty at BHA is to protect, not only the insured, but to protect the carrier from paying any unnecessary claims.

Let’s talk again about Carrier B. Our agents often come to us requesting policy corrections. Whether it is as simple as amending a mailing address or something more complicated like asking to add several units or correcting an underlying schedule, we expect our carriers to turnaround quick replies. Usually we see these low-cost “Carrier B” insurance companies provide poor service. Most of us want immediate responses with immediate results. Carrier B is cheaper, but they take much longer to complete a service task. It could take months to issue an endorsement or weeks to reply to a simple question, resulting in several follow ups and extra expense on the part of the agent. What matters most, service, or cost?

An important part of Beacon Hill’s mission is to service an account along all stages of the account, not just during the quoting and binding process. It’s inevitable something will come up that requires attention, and we need the help of our carriers to help find a solution, not cause more problems. Carrier A may be more expensive, but they are quick to jump in and help solve problems not create more. If we have an agent looking to provide endorsements for an insured who is bidding on a contract and the bid expires at 5pm on a Friday, we expect Carrier A to jump in and assist immediately. After all, we are a team! Carrier B may not be as responsive or diligent about the urgency of a request like this.

We are here to provide the best service possible to all our agents. The true cost of low-cost insurance companies can sometimes result in paying much more than originally expected, monetarily and mentally. For more information about our carrier partnerships, or to discuss an account, please contact us or call (800)-596-2156.