The following is a guest blog post from David Thompson, CPCU, AAI, API, CRIS at the Florida Association of Insurance Agents. It is the first in a series of “Do You ‘Rate and Write’ or ‘Counsel and Sell’?” articles.


I am no longer shocked in classes these days when I ask a question like, “A customer comes to you for a homeowners policy. Do you always quote ordinance and law coverage at 50 percent?” Almost invariably the answer is, “No, we just quote apples to apples.” Shocked, no…disappointed, yes. What I really want to say in class (but I don’t because I have to take “nice pills” when I am in front of people!) is, “Really, you are kidding me, right? The customer is coming to you with an inferior product and you don’t tell them that you have something better to offer? Isn’t that part of being a Trusted Choice agent?” My “cut to the bone brutal thought” is, “If an insurance agent doesn’t offer me the best product out there, why do I need them?”

The examples are endless, but here are a few of the common issues that come up in classes:

  • The PAP the agency is competing against has no uninsured motorist coverage or has non-stacked coverage.
  • A CGL policy has an assault and battery exclusion.
  • A commercial property policy does not have any ordinance and law coverage.
  • A business auto policy does not have any “hired car physical damage coverage” because employees don’t rent cars for business. (And of course they would NEVER do that in the future!)
  • A flood policy has only building coverage; no contents coverage.
  • A homeowners policy does not have replacement cost coverage for personal property.

Why would anyone (insurance professional or otherwise) not tell a customer or prospect, “I can offer you something better than you have for not a lot of money?” A few examples come to my mind.

  • A well-known sandwich shop often runs a special for “sub of the day.” Several times I have ordered a six-inch turkey sub (about $4.50) and the clerk said, “Sir, that’s the sub of the day. For $5.00 you can get a foot-long sub.” That is a bit over ten percent more.
  • About two years ago I traded in my 2007 Civic, and amazingly the same sales representative was still there from back in 2007. I told him I wanted a 2016 Civic, either red or blue. He said, “Come on man, that Civic is nice but let’s upgrade you to an Acord.” There was some humor there, but he did “make” me walk over and look at the Acord. The difference was about 19 percent. (I stuck with the Civic!)
  • I just bought a new oven; mine of 25+ years finally died. Being an avid cook, an oven is critical for me! I went to a local appliance store with a photo of what I had. The sales rep took me to the brand I owned (She said it was her favorite brand) and showed me three to select from. My oven was the “middle” model. After showing me the features she said, “The best model in that brand is this one.” She showed me the features of the “top end” model (none of which appealed to me) and pointed out the price difference of about twenty percent.
  • In January I took our daughter to New York City. (It was the weekend of “The Bomb Cyclone!” The temperature ranged from 5 to 15 degrees for three days!) After booking the hotel room with the brand that I most often frequent, I immediately received the email confirmation. Within about one minute I received a second email showing me the upgrade options I could qualify for. One was an upgraded room with a better view, one was free breakfast, and another offered a package of other benefits. The room rate was about $170, while the lowest price upgrade was just about $20 more; under 15 percent.

Agents often tell me, “Customers buy on price; they won’t spend more money.” Let’s think about that statement. Suppose that an agent quotes the best product 100 times, such as stacked uninsured motorist coverage equal to the bodily injury limits. Of the 100 quotes, only eight buy it. That’s a horrible batting average; only eight percent. What major league baseball player would stay on the roster with those horrible numbers? Think, however, about this: “If the better coverage is never quoted, the “batting average” will be a big fat zero percent. If the best coverage is not quoted, there is no way a customer will buy it.”

To illustrate this point, look at our Education Library article titled: Uninsured Motorist Coverage: An Agent Who Gets It (Note: You must be an FAIA member to access this article.). The article involves Matt Carlucci of Brightway Insurance (name and agency used with permission) and his quest to offer the best coverage to his customers. He concludes his remarks with this:

“I guess the last thing I’ll say is that there has always been this prevailing notion in the agency force that ‘customers won’t pay for that,’ and it’s only true about 50 percent of the time, or less. It’s amazing what a customer will do when you simply add the words ‘I recommend…’ at the end of your email, or in a conversation. People know very little about insurance, so they’re looking for recommendations. Too many agents are afraid to give it.”

With technology today, it’s very simple to quote multiple coverage options. I go back to the days when every quote involved a pencil, paper, and handheld calculator. Quotes of five different auto liability limits involved five different “crunching the numbers” mathematical calculations. (I probably did the math wrong 20 percent of the time too!) Today it’s as simple as checking a few boxes on a computer screen to offer different options; it takes only seconds.

Tim Dodge, AU, ARM, CPCU is Assistant Vice President of Research (and self-proclaimed “Insurance Geek”) for the Independent Insurance Agents and Brokers of New York. In an article Tim wrote dealing with why agents should read the policies they sell he stated this:

We are insurance professionals. We are Trusted Choice, for crying out loud. Maybe we’re not all CPCUs, but that doesn’t mean we shouldn’t meet the requirements of the CPCU canons at the beginning of this article. We have ethical obligations to the people we serve. We owe it to them. We owe it to our peers in this industry that has treated us so well. We owe it to ourselves.

Tim’s comments are right on-point here too.

What about you, are you just an “apples to apples” person, or do you always provide customers with the best coverage option available?

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Bill Wilson

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One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information