Would you ever picture yourself buying business insurance in your pajamas? No, it’s not like one of those weird dreams where you show up for a test at school and aren’t wearing any pants. We’re talking about technology and the ability it affords small business owners to shop for insurance at any time of the day, from any place, and wearing whatever they need to wear.
Technology doesn’t judge you. Let’s be honest, with as much as you have to do during the day to run your business, sometimes there are tasks that you have to push late into the night or squeeze in at odd hours. Plus, shopping for workers’ compensation, general liability, and property insurance isn’t exactly something you’re likely chomping at the bit to do.
Shopping on your Schedule
Thankfully, you don’t have to make phone calls to insurance agents at midnight or rush off to meetings to discuss your insurance in the wee hours of the morning. Like many business functions, technology is giving small business owners the power to take things into their own hands on their own schedule.
Specifically, the business insurance technology industry is seeing a boom (you can call it InsurTech, if you want to label it). As a result, you can now quickly and easily shop for your insurance while you’re watching the news in the morning, squeezing in a quick lunch at your desk, watching your kid’s soccer game, or yes, even in your pajamas late at night.
Technology has brought the business insurance shopping experience to your phone, tablet, or computer, which makes it far more convenient to fit into your schedule than the typical phone calls and meetings with agents.
Comparing Quotes
One of the most important components of saving money on your business insurance is to compare the policy cost from one insurance carrier to the next. Why? While some rates are standard, when it comes down to the final quote for your policy, the cost can vary significantly, many times by thousands of dollars for the same coverage.
Each carrier has set its own formula for risk based on a number of factors including industry, employee payroll, and job descriptions, revenue, and past claims the carriers have dealt with for similar businesses. It may not make sense that carriers each have different prices for the same coverage, but it’s reality.
What’s also a harsh reality is that small businesses don’t often get to compare multiple quotes when they use an insurance agent. It’s not that the agent is a bad person or professional, but the economics of it don’t pencil for them.
Often times, the commission for a small business is quite small, so it’s not worth the amount of time that it takes an agent to gather and compare numerous quotes for you. But, if you want to feel confident that you’re getting the right coverage at the right cost to your business, it’s crucial to shop around and compare quotes side by side.
Quotes vs Rates
Speaking of comparing quotes side by side – be sure you’re comparing quotes and not rates. This is a very common mistake, especially when shopping for insurance online. Rates are pretty easy to come by – there are quite a few companies offering to let you compare rates for free to help you get the best deal. They’re not telling you the whole story. We’re not accusing anybody of lying, but there is some misdirection at play here.
Rates are broad estimates and generally filed with individual states. Because they are filed with the states, they are public record and online insurance companies can do a quick calculation based on these filed rates, and the information you gave them, to give you “the rates of our competitors.”
The filed rate may be interesting, but it doesn’t tell you how much your policy will actually cost. Have you noticed you can’t buy a policy by seeing rates? If you read the fine print you’ll see that it’s just an estimate. Rates are baseline estimates, quotes are the actual sticker price for the policy.
Shopper Beware
If you are intending to shop for and purchase a business insurance policy online, just make sure you know what you’re requesting and what you’re getting. Again, rates are fine but if you want to know what your actual policy will cost, you want quotes.
Some websites will give you a “get quotes” button, but actually provide you with rates and then sell your information to agents who will follow up with you to get more information so they can provide you with an actual quote. If that’s not the experience you’re after, make sure you understand what you’re getting or you may only end up with rates and an inbox full of solicitations.
If you want to get back to running your business look for sites that allow you to complete your purchase online. Technology can be your best friend if you want to save time and money, you just need to understand what you’re getting.
This article was originally written on July 11, 2019.
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