The range of personal insurance products available in today’s market is extensive, with new products and insurance providers entering the market all the time. While it may or may not be realistic for a single insurance company to satisfy all your insurance needs at any one time, a single broker is the recommended way to handle those needs and coordinate your coverage and placement with the insurance marketplace.
The reason: A broker is best equipped to understand the totality of your insurable assets and coordinate them with the appropriate protections.
A good insurance broker will not only sell you a policy, but act as an advisor on personal insurance matters. Such an individual will work to make sure your family, your possessions and your assets are properly protected. With a full view of your personal insurance needs and concerns, the broker can recommend a solution that adequately addresses them.
While many of the important insurance coverages and policies operate independently, some rely on the others. An example is liability insurance, where there are minimum coverage limits required in order to seamlessly connect
with the excess liability policy.
It is not uncommon for a broker to uncover changes over the course of a year which have far-reaching consequences for coverage.
Every excess liability or umbrella policy has underlying liability limit requirements. Someone with a $10 million excess liability or umbrella policy might, for example, have an underlying limit requirement of $500,000 for automobile insurance. If the auto policy has a lower limit of, say, $300,000, the insured becomes responsible for that $200,000 gap in coverage before the excess policy were triggered. A relationship with a single insurancebroker handling both the underlying and the excess policies will more clearly allow for the discovery of these potential gaps in protection.
There are other advantages associated with placing multiple lines of business with the same broker; and this is frequently a starting point in our reviews. The most obvious is their ability to secure coverage with a single carrier, allowing for the potentially substantial discounts most insurance companies provide for multiple policies. It isn’t unusual for a company to provide 10, 20 or even 30 percent in savings for customers who place all or most of their business with them. While this list primarily includes coverage for homes and autos, it can also include valuable-items coverage, personal excess liability, and more. Often, the more policies an individual has with the same insurance carrier, the greater the discounts he or she receives.
Best-in-class brokers perform full reviews with their clients annually and take a deep dive on potential exposures for loss. An annual insurance review meeting is wise to help you keep pace with the changing exposure to loss, based both on the changes in your life and the ever-changing insurance marketplace. It is not uncommon for a broker to uncover changes over the course of a year which have far-reaching consequences for coverage.
We recommend carefully selecting a broker with the experience and market access to handle your needs and consolidate all your protection to that single provider. The next, even more important, step for you is to commit to meeting regularly to review that protection.
This article was originally published in the December 2016/January 2017 issue of Worth.