I’m pretty confident that I just lost the opportunity to insure a nice commercial property.
Here’s the story: an older (circa 1880) downtown building. Massive old building, 3 stories and well over 6000 square feet. They paid peanuts for the building, however that means nothing to an insurance company. Replacement cost is how we insure property, and in some instances, we use actual cash value (replacement cost minus depreciation for age, condition, etc.) You can read about the finer points of replacement cost and actual cash value in my prior blog post. But let me tell you this- insurance companies bow before the altar of insurance to value- it’s part of the legal insurance policy contract. And us agents have to bow too.
I did a preliminary replacement cost estimate- about $1 million. Not feasible, as it would never be rebuilt exactly as is. So, I moved on to actual cash value-about $300,000. You can be confident that the insureds paid NOWHERE near this amount for the building. There’s also an option to insure at 80% of the actual cash value (around $237,000).
I presented both options to the insured. I knew she wasn’t pleased, but I had no choice. I know how the insurance contract reads and I know that you must insure based on the provisions of the policy or else the client will get totally fleeced at claim time.
But when I didn’t hear back, I knew.
- She found someone else who was willing to insure it for the amount she wanted, insurance to value be damned.
- This lower amount obviously translated to a lower premium and being the human beings we are, we always want to pay less.
I know there are many agents out there that are crying for business and will do whatever it takes to get that business.
Everytime a situation like this happens, it totally SUCKS. BLOWS CHUNKS. Whatever phrase you want to use (and several profanities do come to mind). Sometimes the right thing costs you business.
But I won’t do business any other way. I just can’t.
And neither will my agency- Alan Galvez Insurance. Our customers know it. Our staff knows it. Don’t misunderstand- I’m not saying I’m perfect or all high and mighty. I’m just saying that when it comes right down to it, I cannot, will not, do what is wrong just to write a policy.
Because I know, when it all shakes out, and the claim comes (and it will, it’s just a matter of time), I don’t want to be the one having to say to you, “Sorry Mr. Jones, because you underinsured your building, you now will only get half of your claim paid. Yep, that’s right- instead of $100,000, you’re now only going to get $50,000. Isn’t that just special?” How do you think that conversation will end? Do you think the few hundred dollars saved due to underinsurance makes up for the extra $50,000 not being paid? Do you think your client will be thinking warm, fuzzy thoughts about you? Or will they think they’ve been had?
My job is to protect you and help you when the worst happens. I want to make doubly sure that we’ve worked it out in advance that when the claim does happen, you’ll be satisfied. Because it’s true- you get what you pay for. Cutting corners, not following procedures and generally leading you in the wrong direction is NOT being helpful. It’s not protecting you.
Every time this happens, I call it my “Come to Jesus” moment. I’m sorry if it offends you, but it is a watershed moment. You have to revisit your core values. You have to ask “What am I not willing to do?” You have to be able to look at yourself in the mirror and be proud of what you see.
NOT. EASY. Especially if you have bills to pay, mouths to feed- you get the picture.
So now you know how I roll. If you can handle it, then I’d love to help you too. Contact me to discuss your insurance (Ohio residents only). You’ll get straight answers, professional guidance and above all, the knowledge that I truly have your best interests at heart.
Ever have a “Come to Jesus” moment? What did you do? I’d love to hear from you- no matter the industry, there is always temptation to cut corners. There is always an opportunity to do wrong.
Thanks so much for reading.