An insurance company underwriter just provided a workers compensation insurance quote to a broker for one of my clients. The broker was kind enough to pass it along to me in its entirety, and the contents provide some stunning revelations about the true nature of the insurance industry.

Quotation A is provided by the underwriter, and it has some very competitive numbers. The underwriter also provides Quotation B, which is 2% lower than quotation A. The underwriter comments to the broker that he is authorized to use the lower Quotation B, “if necessary”.

In this case, that 2% represents about $2,000. Do you feel it’s necessary that our client save that $2,000? I certainly do. In another example that happened last week, we witnessed an insurance company reduce a quotation by $20,000 in the face of authentic competition from another company. They published one quote in writing, then a week later published a second (coverage-identical) quote that was $20,000 lower.

I am not making this stuff up — It happens all the time. You need to take specific, methodical actions to get to the true “bottom” of the market. Otherwise, what your broker or insurance company is telling you is a “rock bottom” policy quote may be very, very far from it.

So how do you get to the bottom? For starters, read my book (subscribe for a free copy at http://icrs.biz/bookoffer/ or by clicking the eZine subscription on the right-side pane of this blog). You can also read the tips in this blog, or even call or email me for advice… whatever it takes to get your premiums down to where they *should* be, not where your insurance company and broker want them.

Unfortunately, the insurance market is an odd bird in that it doesn’t normalize pricing automatically through competition as is the case with other markets. With insurance, you’ll need to give it a little push to help it along. That happens to be something that I love helping companies do.

- Don