I\’m a small semi-captive agent/broker as well. I pay $5,904 annualy for $3mm in E&O coverage. It looks like I might be seeing a 2% increase next year as well.
When I started my own E&S brokerage agency in 2004, I was lucky to find coverage for only $3000. with an AIG Company. Paid $3000. again 05-06.
This year I shopped like a crazy person after AIG stopped writing Ins. Agent\’s E&O in my state. I swear I must have completed seven different 4-8 page applications! I ended up with only two firm quotes (they hate wholesalers)but I was lucky enough to find an admitted carrier to write me for $2500.
I will have to agree w/ Lisa here. You DO get what you pay for. Not saying all non-admitted paper is bad but I don\’t think the claim handling and coverage would compare with a more prominent, admitted carrier. I know the carriers are limited here in CA so I\’m sure many agents are with Lloyds, Arch, etc.
Also, in response to Walter- I don\’t think it\’s unreasonable to tell a client you get what you pay for. Insureds already have the wrong mentality when it comes to buying insurance. An insured is not going to pay a signifant amount more for a better policy form / coverage- maybe in a different dimension…
As far as Allstate agents having it lucky for E&O? Yes. Competitive insurance products? Nope.
Nancy,
How much would you like to pay for your coverage? You said that you pay $4500 but you haven\’t had a claim. Isn\’t that the way insurance works? The insurance company combines everyone\’s premium to pay the claims of a few.
If you were to pay less when you don\’t have a claim, how much more would you expect to pay after you DID have one? Or should the insurance company just \”magically\” come up with the money to pay claims?
Myt agency pays over $60,000 for E&O and it goes up every year. I don\’t mind because the increases are due to our growth. In Florida, we watch out for the excess & surplus carriers for E&O because of several clauses: A rated only, defense outside vs inside of limits, and indemnity vs paying on behalf of.
Walter, I mentioned what our agency\’s E & O premium is in reponse to the Insurance Journal\’s article and now you are lecturing about how to be a good insurance professional. I don\’t understand the correlation.
Things could be worse: Once upon a time we were a fairly large, privately owned independent agency. The owner retired and sold us off to a bank. 2 years ago our E&O costs were $600,000 for $5M coverage with a $250K SIR. For renewal, the carrier wanted to increase the premium & our retention, so we went self-insured. I\’ve got my hands full with E&O claims, due partly from our growth. But on the other hand I believe our nameplate simply attracts most of these lawsuits, seeking deeper pockets, for things the same customer would not sue a mom & pop agency over.
The main problem is that most agents (not all) make insurance a commodity and forget about the coverage. What is your price? I get so sick of hearing that question however it is a big part of the offer as most want to save.
I know I do but at the same time, will it meet my needs? This is an important consideration. We are the agents who suggest and recommend and tell the prospect why they need coverage. It is a cost of doing business and should be looked at that way. How do you offset the cost? Write more or bigger premiums to make up for it.
hey nancy, maybe you should consider working at a better company. Lisa is absolutely correct with respect to the saying \”you get what you pay for\”. It happens all the time with my clients.
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I\’m a small semi-captive agent/broker as well. I pay $5,904 annualy for $3mm in E&O coverage. It looks like I might be seeing a 2% increase next year as well.
When I started my own E&S brokerage agency in 2004, I was lucky to find coverage for only $3000. with an AIG Company. Paid $3000. again 05-06.
This year I shopped like a crazy person after AIG stopped writing Ins. Agent\’s E&O in my state. I swear I must have completed seven different 4-8 page applications! I ended up with only two firm quotes (they hate wholesalers)but I was lucky enough to find an admitted carrier to write me for $2500.
Hey Folks,
I will have to agree w/ Lisa here. You DO get what you pay for. Not saying all non-admitted paper is bad but I don\’t think the claim handling and coverage would compare with a more prominent, admitted carrier. I know the carriers are limited here in CA so I\’m sure many agents are with Lloyds, Arch, etc.
Also, in response to Walter- I don\’t think it\’s unreasonable to tell a client you get what you pay for. Insureds already have the wrong mentality when it comes to buying insurance. An insured is not going to pay a signifant amount more for a better policy form / coverage- maybe in a different dimension…
As far as Allstate agents having it lucky for E&O? Yes. Competitive insurance products? Nope.
I tell it like it is…
Nancy,
How much would you like to pay for your coverage? You said that you pay $4500 but you haven\’t had a claim. Isn\’t that the way insurance works? The insurance company combines everyone\’s premium to pay the claims of a few.
If you were to pay less when you don\’t have a claim, how much more would you expect to pay after you DID have one? Or should the insurance company just \”magically\” come up with the money to pay claims?
Myt agency pays over $60,000 for E&O and it goes up every year. I don\’t mind because the increases are due to our growth. In Florida, we watch out for the excess & surplus carriers for E&O because of several clauses: A rated only, defense outside vs inside of limits, and indemnity vs paying on behalf of.
Walter, I mentioned what our agency\’s E & O premium is in reponse to the Insurance Journal\’s article and now you are lecturing about how to be a good insurance professional. I don\’t understand the correlation.
you really can\’t be in insurance if you don\’t know why premiums go up…that\’s insurance 101……..
Things could be worse: Once upon a time we were a fairly large, privately owned independent agency. The owner retired and sold us off to a bank. 2 years ago our E&O costs were $600,000 for $5M coverage with a $250K SIR. For renewal, the carrier wanted to increase the premium & our retention, so we went self-insured. I\’ve got my hands full with E&O claims, due partly from our growth. But on the other hand I believe our nameplate simply attracts most of these lawsuits, seeking deeper pockets, for things the same customer would not sue a mom & pop agency over.
The main problem is that most agents (not all) make insurance a commodity and forget about the coverage. What is your price? I get so sick of hearing that question however it is a big part of the offer as most want to save.
I know I do but at the same time, will it meet my needs? This is an important consideration. We are the agents who suggest and recommend and tell the prospect why they need coverage. It is a cost of doing business and should be looked at that way. How do you offset the cost? Write more or bigger premiums to make up for it.
My two cents!
K
hey nancy, maybe you should consider working at a better company. Lisa is absolutely correct with respect to the saying \”you get what you pay for\”. It happens all the time with my clients.