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Business insurance comes in many shapes and sizes, and although it’s necessary for companies to have it, it’s still possible that you're paying too much for your coverage. Depending on the size and nature of your business, your insurance policies could include things like workers' compensation, business property protection, health insurance, general liability coverage, disability, and more. Even if all of these are necessary for your business, you could still be overpaying for insurance, and this blog is designed to help you determine if you are.
Compare the Coverage You Need with Your Existing Policy
Insurance is built on the philosophy of better safe than sorry, and sometimes it can be easy to get carried away with this idea, even resulting in having coverage that you don’t need. For instance, if you have a fleet of company sedans but are paying for coverage for heavy-duty SUVs, then you're probably paying too much on your premiums, without the right kind of coverage for your needs. Review all your insurance policies and make sure the plans accurately reflect your business needs, size, and operations because any extraneous coverage or policies mean you're overpaying for insurance.
Ensure You’ve Bundled Wherever Possible
Most companies are willing to offer discounts to customers that buy a product in bulk, and this same logic applies to insurance companies (just as it does with a cell phone, internet, and cable providers). Businesses typically require multiple types of insurance, and if you're using various providers, then you're probably not taking advantage of possible discounts.
If you have multiple policies with the same insurer but haven't combined coverage, then you're probably overpaying on your premiums. Talk to your insurer about what kinds of bundling discounts they're willing to offer.
Double Check that Your Employees are Classified Properly
When an insurance company classifies employees, they use that information to determine risk and applicable premiums. For example, a long-haul truck driver will have a different categorization than a truck dispatcher, and you can guess which one will be more expensive to ensure—the driver because that profession comes with a higher injury rate. If care wasn’t taken to classify and code all your employees properly, then it’s more than likely that you're overpaying on insurance because of it.
Look Into Your Current Deductibles
In general, the lower your deductible, the higher your premiums will be. So it makes sense to review the deductibles on all your different policies to see if they're on the lower or higher end of the spectrum. If your deductibles are all low, then it means you're paying a lot more every month than you need to be, and you can lower your premiums by increasing the deductible you pay in case of a claim.
Check that Your Information and Policy are Up to Date
Although it may not seem like a big deal, out-of-date information on an insurance policies could be costing you hundreds of thousands of dollars each year. The cost of an insurance policy is calculated based on a number of factors, including:
- Nature of the business
- Number of employees
- Type of employees
- Product or service offered
Consequently, any change to this information could have an impact on your premiums. For instance, if you’ve moved office buildings since the policy was written and now occupy a building with more security and newer technologies, then you might qualify for a lower rate. If your policy isn't updated with the most current information, then you could be paying more than you have to.
Overpaying for insurance isn't something any business should be willing to do, it could cost you a lot of money on unnecessary premiums. Some of the most common signs you're overpaying for business insurance include that you have too much coverage or the wrong type of coverage, you're using multiple insurers or not taking advantage of available discounts, your deductibles are too low, or there are errors and outdated information in your policy. Any of these factors could indicate you're paying too much for insurance, and correcting them will result in lower premiums and great cost savings.