As recessionary pressures have mounted on both consumers and businesses, we have begun to see certain trends occur in both insurance companies and insurance agents with respect to how business is being conducted. It's well documented that the insurance industry is hemorrhaging money in the property and casualty markets nationwide. But more than that, North Texas is ground zero for some of the worst losses that are being suffered. Insurance rates are skyrocketing and the insurance companies are constantly stripping policy coverage in an effort to trim the losses and remain solvent. The trends are jarring as it's not just a single insurance company that is experiencing this, but the industry as a whole. It is easy to understand that business owners are looking for relief and if you're like us, the phone hasn't stopped ringing with people eager to solve our inflation problems. So what should you do with your business insurance coverage?
The Commercial Insurance Problem
The commercial insurance agents at Insurance For Texans are seeing a concerning trend in the commercial insurance space. It's one that could cost you your business. Unless you live under a rock, you've probably seen that your home and auto insurance policies are going up. We've seen sizable increases on premiums of 30% or more across the board with our own customers. Important national level insurance companies are halting the sale of new business or pulling out of the state of Texas altogether. It has become frightening for insurance professionals and their insurance agencies to determine how to best advise Texans both in our current book of business and new folks coming to us for insurance products.
Given the problems occuring in the home and auto insurance market there are a lot of agents, both captive agents and independent agents, who are losing current clients left and right as these companies are leaving the state. These losses affect their business' profitability as the loss of revenue has been staggering for some. As a result, these agents are being stressed into writing new business to offset those losses to their home and auto business. One thing that these agents are looking towards is moving over to the commercial insurance space in an attempt to remain in business.
This shift in activity is a concern as many of these agents are inexperienced with commercial insurance policies. They simply don't know what the policies actually cover as a result of inexperience when compared with a traditional commercial insurance agent. At Insurance For Texans, we have commercial insurance agents that have been doing this for many years. A decade or more in some instances. When our customers and prospects bring competing proposals to us to compare, we're seeing a number of them that are missing valuable or even required coverage items. This can damage or destroy your business in a claim scenario.
How These Omissions Affect Your Business
Whether you are working with a captive agent or independent agent, it's important to understand what your policy does AND does not cover with respect to your business. The selection of products and endorsements by your commercial insurance agent is vitally important to you understanding these items and making an informed decision rather than focusing solely on the insurance rates.
If your property is underinsured on replacement cost values, you could be left holding the bag rebuilding or replacing the equipment you need to run your business successfully. If coverage is omitted and you have a liability claim, who is going to defend you and pay a judgement if it is rendered? There are a number of issues that could cause you to lose everything. If you are using a very inexperienced commercial insurance agent, we would recommend a second opinion on any proposal that you are presented with. Whether they are a captive insurance agent or an independent insurance agent, it doesn't mean that they will know what they are doing. Just having insurance licenses doesn't mean that they are actually working as a fiduciary on your behalf.
It's Not Their Fault
It's not that these agents who are new to commercial insurance are trying to do this to you, it's simply the fact that they just don't know any better. They are just trying to write business to put food on their family's table like all successful insurance agents do. The problem is that commercial insurance policies are more complicated than home and auto policies. And these problems are magnified by a lack of experience.
At the end of the day, we encourage Texas business owners to make sure you interview a new to you commercial insurance agent to understand their experience in your particular industry. Make sure that the agent has experience in the commercial industry specifically for a number of years, or that they have a mentor in their insurance agency that's helping them write that policy for you. This interview and research could end up being the difference between being covered or costing you your business. Missing potential coverage forms that an experienced commercial insurance agent would be mindful of for your particular risk can simply cost everything.
How To Obtain A Successful Insurance Agent For Commercial Risks
While we are a bit biased at Insurance For Texans because of our personal work experience, we believe that independent agents are the best solution for any commercial insurance policy. This is simply because an independent insurance agent will have many insurance options provided by many insurance carriers to meet your needs. Not all independent agents are experts in commercial policies, but the ones that are excellent.
If you have any questions or concerns about proposals, policies, or inquiries that you have received, we at Insurance For Texans would love the opportunity to help you make sense of it. We have decades of commercial insurance experience and have insured a number of different industries across the state of Texas. We are an independent insurance agency who works with a variety of insurance companies and insurance brokers who specialize in the commercial insurance marketplace.
If you'd like to have that conversation, hit the button below or call us at 469.789.0220!