Do you know insurance is highly volatile for contractors? It is really important to thoroughly shop your renewals every year, to defend yourself against overpaying and sudden changes in the market.

The key to defensively handling your insurance is to develop concrete alternatives before a crisis arises - which would demand a sudden change in your existing program. Because there is a wide range in pricing for commercial insurance coverage, it is possible to pay double or triple the lowest available price for your commercial insurance program. It is amazing how widely different prices are quoted from the same set of quote specifications sent through different channels. Often, it is hard to believe that the quoting insurance companies are all looking at the same account. Such broad swings in pricing may be unique to the commercial insurance marketplace.

Shopping your account helps you increase the odds of being insured if a loss occurs. Just like getting a second opinion from a doctor, having several competent agents look over your exposures and recommend coverages can prove worthwhile. Most coverage packages can be improved, and a second agent hoping to win your account may be more alert and innovative with coverage suggestions. For example, a few changes in coverage may take you closer to your objectives in how you spend your premium dollars. Many businesses are purchasing coverages for exposures they could easily handle without insurance, while being exposed to hazards that could ruin them.

As you accumulate alternative quotes, you gain valuable negotiating power. With multiple quotes in hand, you have the power to change agents, and select the agency you want to handle your account. You can reveal to your broker you have a more competitive quotation in hand. Watch as the agency scrambles to find new ways to lower its current quote and offer you new and improved services. If the agency does not try to get you a lower quote or better service, maybe it is time you change agencies anyway. Since you have the necessary alternate quotes, you can do so quickly and conveniently. Having concrete alternatives puts you in the driver's seat when the time comes to negotiate your renewal. Most businesses should regularly shop their insurance for many valuable reasons. Even when you are getting excellent service, it pays to have your agency's work regularly inspected by other agencies. You can remain satisfied with your favorite agent, while you maintain a focus on your competitive position. For example, you might make a difficult decision to reduce costs by buying your coverage this time from your broker's competition. At least when the time arrives, your former agent may be motivated to do everything possible to win you back.

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