Commercial Insurance Rant

[Master Bait'r]

These scam artists make my blood boil- commercial packages are the biggest racket going and it makes me so angry I can hardly articulate myself.  Oh, we paid in full for last year and although there were no claims (ever in fact- over 30 years in business) and no changes in coverage you've decided that we owe you another $2k for two months worth of coverage- when they didn't pay out a dime???  

 

 

Honestly, what other industry can pull this crap?  I don't get it.  I really don't.  They are straight up strong-arming small businesses in a way that makes no sense and is completely unsustainable.  We pay out the nose for literally nothing and then when they up and feel like they didn't make enough money on the nothing they gave us LAST YEAR they hand us another bill that's whatever size they deem necessary- NECESSARY FOR WHAT???  I would love it if someone was an insurance person who could explain this magical process to me.  This has NOTHING to do with medical coverage or Obamacare etc. before anybody tries to take it there- I'm just wondering what mentality can justify the fleecing of businesses in such a manner.  They money is gone and this was a year ago- no claims were made and no policy changes were made.  What gives???  

 

 

 

[flyfisher]

Insurance does seem like a racket, except when you need it.  I have been driving for over 20 years, never had a claim and never missed a payment.  I had an accident about 3 weeks after i bought my jeep in 2013 and since it was a newer model, 2012, the damage was way more than i would have thought to the tune of about 13k.  So I was pretty happy that i had it and if i calculated out what i have paid over the years for insurance I would bet that I am still ahead as far as what they paid versus what i have.

 

i guess the easiest way is insurance sucks, until you need it.

[Big C]

 

 

Honestly, what other industry can pull this crap?

 

 

The landscape industry   our company doesn't but, for instance I've heard of all kinds of crazy things like "bush pulling" (taking out bushes from someone's new landscape to put on their project).  Pinestraw, guys charging for 100 bales and only putting out 75 or 80.  There are all sorts of rip-offs  in all industries, it's just that the bad ones give the good ones a bad name.  I would suggest getting a new insurance company (maybe a smaller office), it can make a big difference.

[Lund Explorer]

These scam artists make my blood boil- commercial packages are the biggest racket going and it makes me so angry I can hardly articulate myself.  Oh, we paid in full for last year and although there were no claims (ever in fact- over 30 years in business) and no changes in coverage you've decided that we owe you another $2k for two months worth of coverage- when they didn't pay out a dime???  

 

 

Honestly, what other industry can pull this crap?  I don't get it.  I really don't.  They are straight up strong-arming small businesses in a way that makes no sense and is completely unsustainable.  We pay out the nose for literally nothing and then when they up and feel like they didn't make enough money on the nothing they gave us LAST YEAR they hand us another bill that's whatever size they deem necessary- NECESSARY FOR WHAT???  I would love it if someone was an insurance person who could explain this magical process to me.  This has NOTHING to do with medical coverage or Obamacare etc. before anybody tries to take it there- I'm just wondering what mentality can justify the fleecing of businesses in such a manner.  They money is gone and this was a year ago- no claims were made and no policy changes were made.  What gives???  

 

Disclaimer:  I have never sold insurance of any kind, and most likely never will. 

 

Commercial insurance, such as general liability insurance is based on a combination of two factors.  The first is the insurance rate which is based on the type of business you have.  The second is based on your exposure, or in other words, your projected sales during the policy year.

 

For example, if you walk into your insurance agent's office and tell them you are selling "widgets" and you expect sales to be $100k for the year, the agent may tell you that the base premium is going to be $790.  That would be a rate of $7.90 per/$1000.  If you end up have $150k in sales during the policy year, then you should understand that you will owe an additional $395.  Your premium for the next year will also increase because it will be based on last year's sales.  If you have been told that you owe a whole bunch more money, then one of two things happened.  You either understated your potential sales, or the agent did. 

 

Unfortunately, I have heard your exact same complaint so many times that I couldn't count them all.  As an accountant, I started to make it a practice to ask my client's for copies of the insurance policies so that I could measure the difference between projected and actual sales volume long before the end of the policy year.  This would give me the chance to prepare my client for the bad news you're facing right now.

 

The bottom line is that most business owners fail to learn everything they need to know about this issue, and many insurance agents don't take the time to either fully explain to policy when its sold, or when the policy year comes to an end.  You as the business owner need to educate yourself on how these types of policies work, and that starts with the right agent.