Shopping Smarter

Knowing what insurance carriers look for positions customers for better rates.

Last month I proposed the idea that every customer can take steps to position themselves for the best rates possible. I believe a general understanding of how insurance works and how it is rated empowers customers to make smarter decisions. I don’t feel like last month’s article did it justice so I want to expand on it a little further.

While there are many carriers I have noticed that rating factors generally fall in one of two categories; Experience modifications or Behavioral modifications. This isn’t necessarily official industry jargon but it is a pattern I have noticed. As an agent, I know I am most competitive for customers who are experienced and have a proactive approach to loss control.

When I quote a business I typically look for things like: 1.The number of years in business 2. Driver rating, and 3. Loss history. Generally speaking businesses with tenure, low MVR points, and few or no losses are favored. However, not every business has tenure; what is a business to do when they just opened? Do they have to pay higher rates? Not Necessarily.

With states and carriers where permitted, modifications can be made for a cheaper rate. These modifications are more indicative of the individual risk and can make a huge impact on rate. Make sure to ask your agent if this option is available. Talk to them about management experience, proactive loss control, formal safety programs, employees’ experience level, employee training programs, maintenance conditions of business premises and equipment, safety equipment and etc.

Having these discussions with your agent can help identify potential exposures while saving money at the same time. Consider insurance an integral part of your business and take the steps to make sure your individual risk is covered for the best price possible.