Oct 29, 2009
A few words about price:
Here are some fantastic quotes from John Ruskin (1819 - 1900), Author, Critic, Artist & Philosopher:
'It's unwise to pay too much, but it's unwise to pay too little:
When you pay too much, you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought
was incapable of doing the thing you bought it to do.'
'The common law of business balance prohibits paying a little and getting alot. It can't be done.'
These are not 'dated' arguments - they are simple logic which apply to all transactions, including Insurance. Those players out there who focus only on the price are actually doing you a disservice. Their PRIMARY ROLE should be to explain the coverage so that you understand what you are buying, make recommendations for improving coverage and generally ensuring that everyone is clear about what is covered and what is not. When the focus becomes only price, key coverages can be missed, or a simple upgrade may be left out that you may be very dismayed to find out you don't have at the time of a claim. Remember, an uninsured loss is almost always going to be more expensive than the premium charged to cover it, assuming that coverage is available.
Finally, it has been shown time and time again that players with a price advantage in the Insurance market are seldom able to maintain that advantage. Sooner or later, as the claims come in, they end up being forced to increase their rates to maintain their financial standing.
Am I saying that price is not important? Absolutely not, but there needs to be a balancing of not just the cost, but the benefit of the advice you receive, the coverage you get and the financial stability of the company you are insured with.
As always, I welcome your comments and input.
Michael Stuart, BBA, FCIP, CRM, CAIB
Grant, Jones & Stuart Insurance Brokers
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