By Ken May
When I started in the insurance business way back in 1982, the two things that excited me most were the insurance industry itself and running a small business for the first time. Believe it or not, the various facets of the insurance business are fascinating and being my own boss for the first time was both frightening and stimulating.
As I continued my journey in this business, technology became a magical tool which, as you all know, has accelerated to areas that I never dreamed of just a few years ago (when I started, a piece of carbon paper and a paper clip was the technology of the day).
Today, the latest technology still fascinates me but the one constant for me over the past 29 years that always piqued my interest has been human behavior. Observing how people react to a myriad of situations really interests me and I must admit, sometimes our clients give me a lot of joy and other times, not so much.
We are all experiencing a very difficult economy. And it seems that many of my clients in the North San Diego Tri-City area have been hit harder than others. My family and I, my employees, my friends, and my business have suffered as a result. But it’s important to remember to keep perspective, especially during this economical crisis.
I spoke with another insurance professional recently who told me that many of the clients they have at their company (a large nationally known direct writer) are reducing their liability limits to state minimums, even though they own a house or other property! A horrible move!
Recently, a client cancelled his auto insurance policy with us because he got a better “deal” with another agent. What our client didn’t understand was that he purchased a basic limits policy and his policy with us had substantial coverage, enough so that he could keep his umbrella policy (an excess limits policy) to protect his house, his business, and all of his assets. We had no choice but to cancel the umbrella policy because his primary policy was woefully inadequate to qualify for the umbrella policy. So now this guy who owns a house, rental properties, a business, and other assets is nowhere near adequately insured and could lose everything. Why? Because he lost sight of the big picture and put everything he owned in jeopardy. Was this really a great “deal”?
This morning, we had a gentleman come into the office very upset that the company that we placed him with paid out on a very minor claim, even though he was not charged for the “fender bender” that he was involved in. I explained that this was strictly a business decision that all companies make every day. His company decided that it is better to pay out a little now rather than pay for a big fight in court and potentially pay out a lot of money later. Then he became upset that he is being charged $75.00 for roadside assistance that he never asked for. I calmly explained that his company decided to provide all of their policyholders roadside assistance coverage for up to $75.00 as long as their vehicle has collision coverage at no additional charge. He reacted by cancelling his policy.
So here we have a situation where an insurance company professionally and properly handles a claim in his behalf and even though he was at-fault for this minor incident, didn’t charge him on the policy or his driving record for the accident. And, he was receiving additional coverage at no cost to him simply because the company feels that it gives their clients an extra incentive to stay insured with them.
There was no reasoning with this man. He had his mind made up that no matter what I said to him, he was going to show me by cancelling his policy. And I’m sure he went to another company where he is paying more for less coverage. Why? Because he lost perspective. Is he just blowing steam over what life has dealt him lately? Maybe, but why do something foolish that only hurts him further?
Recently, a young couple insured with us experienced a terrible accident. The problem was their insurance had been cancelled due to non-payment despite written warnings from the insurance company and numerous phone calls from us. They felt like they were successfully “gaming” the system when the worst thing possible happened. They are now personally responsible for the other party’s damages and medical expenses and are still paying a car payment on a car that no longer exists. This is a case where their perspective was obscure.
A few years ago, I worked at a start-up insurance general agency in Texas. I went “all-in” on this endeavor. I sold my house in Carlsbad and my prior insurance agency in Oceanside for what seemed like a dream opportunity. Unfortunately, the insurance division of the company went out of business after 3 ½ years and my family and I lost everything. In fact, we dragged ourselves back to California on credit cards to start over again and start Ken May Insurance Services.
It would have been easy for me to lose my perspective, to only look at the horrible short-term situation we were in and not the long-term possibilities. What I am trying to say is that I understand what we are all going through. I’ve been knocked to the floor but by keeping my perspective, I’ve been able to get up once again, dust myself off, and keep moving forward.
So as things get tough financially, please remember to keep your perspective. Before making a knee-jerk decision on anything financial, check with your advisors. In the case of your insurance, please call us before making changes that you may regret later. We are able to assist you in making the right choices emotion-free which otherwise could take you in the wrong direction. If we don’t help you in making the right choices and keeping you properly protected from potentially catastrophic financial decisions, then we aren’t doing our job and you rightfully need to find somebody else to take care of you.
Be careful. There are many insurance “professionals” out there who have lost their own perspective or are just plain ignorant that will sell you a bill of goods with nobody’s interest in mind except their own. Keep a level head, don’t panic, and feel free to stop into the office, call us, or go onto our web site at kenmayinsurance.com for answers. If we don’t keep our perspective (and yours), fire us. If you are happy with us, please tell your friends.
Ken May has been serving the North San Diego County insurance community since 1982 except for that brief 3 ½ year stint in Texas. He is also the president of the American Agents Alliance, a non-profit professional insurance agent’s organization that originated in California in 1963. And over 60% of those that leave Ken May Insurance Services for any reason come back later.