!st, It has happened many times that the insured is offered a lesser amount on a claim than the insurance coverage, (not counting deductible or depreciation) this info comes to me from individuals who have bemoaned their experience with a boat insurance claim. They then needed to negotiate the offered amount with their expectations. That is what I was referring to as negotiating. I might add that in those with who I had a personal level of communication, the final outcome was usually higher than the initial amount offered but took a protracted amount of time. OH, and some of these situations had agents involved others didn't.
You share 2nd hand info of individuals "bemoaning their experience" for their claim. In 20 years of insuring boats, as an agent, and underwriter, and national program director, it's been my experience that the claims that go sideways almost always are derived from a policyholder not reading their policy and believing that "everything is covered"- which is simply not the case. A claim is a simple thing- the vessel is damaged, and the insurer pays the claim per the policy language, or pays for the total loss per the policy language. The agent is almost never directly involved in a claim, because the separation between claims and the servicing agent (be it a direct agent of independent) keeps the claim ethical and clean. Where the agent can get involved (as I did with BD) is to light a fire under the ass of the claims personnel so the process is not delayed for any unethical reason.
2nd, how would an agent know more about the insurance company than the insurance company when offering insurance. Maybe an insurance company would put a new employee on the phone before truly being vetted, which I doubt, but as was mentioned about the agent at the boat show, you can get inexperienced people wherever you go. I think the insurance company is less likely for that though.
I don't exactly understand this line of logic. I can say that the independent agent oftentimes has a better overall grasp of marine insurance, because the IE deals with a multitude of markets, and part of the job is to know they polices he/she represents so the client can be placed in the best coverage possible based on their situation. I know which markets condone liveaboards, and which companies do not play in hurricane prone water. I know what markets to approach for the couple going thru the Canal, and who does not play in Alaska full time. Knowing the appetite of each market is critical to my business. I saw (during my tenure as an underwriter) underwriters that did not know their own product, much less have any idea of how to present against the competition outside of offering a lower price by shredding coverage.
3rd, since I queried BoatUS on my insurance at the BoatUS insurance phone number, and was told that BoatUS was 1 & the same as GEICO and that my insurance was going to remain in effect, I'll go with that. IF Peter has some inside info that differs then I'd like to know where he gets his info to say, "Boat US will apparently be phased out as an insurance channel and will be relegated to the TowBoat US business unit and the BoatUS Foundation, the lobbying arm."
As National Program Director for the GEICO Marine charter and commercial insurance program, I had plenty of insight into the inner workings of the company. The phaseout of the BoatUS insurance channel has been a top topic at GEICO since 2017. I was on the team that rewrote the GEICO policy into its current form as part of that planned integration of the BoatUS product line into the GEICO form.
You are written direct with BoatUS, so your policy is not affected. Please refer to post #1 in that the topic is the termination of the Independent Agent sales channel, and GEICO's change to a direct and captive agent sales channel.
Since GEICO bought BoatUS even if GEICO drops the BoatUS arm of sales, would it make any sense for them to NOT fold my insurance from BoatUS to GEICO?
GEICO did not buy BoatUS. GEICO became part of Berkshire Hathaway in 1995.
BoatUS was sold to National Indemnity (a 1967 Berkshire Hathaway acquisition) in 2007.
BOATUS wa transferred to GEICO Marine control in 2015.
Is GEICO dropping their agents who handle home & car insurance or just boats?
GEICO is terminating its relationship with all independent agents, no matter the line of business.
IF GEICO is dropping all agents who handle all of their insurance books, then it would seem that since GEICO is the largest insurance company, I believe, that more insurance companies will do the same. As I previously said I have USAA for my home & car and that is obtained only, to my knowledge, directly from the company.
It is common for an insurance market to evaluate its business and change strategies based on their business necessities. USAA is no different- for years USAA partnered with Markel American for its marine insurance, and changed to Progressive based on its requirements.
Let's establish a fiduciary relationship. Who pays the agent? Does the insured write a check payable to the agent for the insurance and the agent's commission? IS the commission a separate charge or is the check for the insurance with the commission rolled into it? It has been a while since I have dealt with an agent so I need some clarification. The last agent I had was a friend who said this is your insurance cost and I sent her a check for that amount.
IF the check covers insurance costs and part of that cost is commission, then there is a grey area of who is paying the agent. That would establish the fiduciary relationship. I would believe that the money flows from the insurance company to the agent. How else would the company have any control over the agent? Although, since the check is sent to the agent, my sister had an experience where she had been paying the agent for insurance and when she had a claim found out she didn't have insurance (the agent wasn't paying the insurance company).
My point on shortfalls of payment on a claim was that IF the agent is your fiduciary agent, and the insurance company tells you/him this is your payment on the claim and it is not what the claim should pay who would make up the shortfall (not including the deductible or depreciation)?
The insurance contract is between the insuring company and the policyholder- the agent (be they direct, captive or independent) is the sales force for the insuring company. All agents get paid; whether it is salary or commission. what you as the policyholder pays as an annual premium. How that is doled out in salary or commission is between the insuring company and the agent.
The IA has a contractual relationship with the insuring company. if premiums collected are co-mingled or otherwise not deposited into trust, then the agent is on the hook for any legal ramifications that come as a result of that criminal endeavor.
What is paid on the claim is what is paid on the claim- not your perception of what should be paid. Read the policy and understand how the policy operates.
The other thing that comes to mind with an agent; how can an agent get the individual the best price when his commission is based on the sale he makes? Are agents in the business to make money? Boats, golf club memberships, mortgages are all expensive. An agent wouldn't be able to have many of the nicer things in life if they are always cutting their commission to get the individual the best price. Can anyone clarify this?
The agent shops the markets for the best for the client, based on a combination of:
- Coverages that meet the vessel owner's needs/requirements
- The most competitive premium available.
Note the order of the 2 criteria- that is the order of importance.
What an agent can or cannot afford has little to do with income, and everything to do with sound and prudent financial planning. Your allusion that agents are money grubbers with little to no consideration to doing right by their client is frankly insulting.
My personal experience with an agent was that I had to call 2 or 3 times to get a response when I was looking for a quote. I already had insurance so I was shopping. When I finally got the quote, which was very similar to the policy I already had and from the same company I already had, that was 'direct' from the company, the agent's cost was considerably higher. I wasn't getting any more, if I went with the agent, than I already had, except higher cost.
If all the information used to rate a risk is exactly the same, the premium is exactly the same. I'll bet (based on experience) that the direct agent shorted coverages or changed other criteria to garner the lower premium- OR, parameters such as years of experience or other criteria (vessel value, nav area, etc) changed the underwriting parameters in the timeframe between when you acquired your current policy and when you reshopped your policy.
Admittedly, I'm not an insurance agent (is Peter an agent being a Guru?) and don't know the finer points of insurance. As someone said, if you are comfortable with your agent you should help that agent with the boat, golf club memberships, or mortgage payments. Me, I'll stick with doing my business direct and hope I am getting the best price. I should be!
Take the time to read and understand your policy and what is and what is not covered- hope is not a strategy. The worst time to find out about lack of coverages is when a claim occurs.
This is where the value of the IA shines- knowing how to obtain the best policy for the client, or (as in this case) giving GEICO insureds a heads up to ensure that they know what is coming form GEICO and that we (the agency) are already on top of the situation to ensure that the insured remains in coverage.
In closing, the only way to know if 1 insurance company is better than another is how they pay their claims. To say I have left this insurance company for another and it's better is really hard to tell until the crying time starts.
Further, I believe an agents' commission on a policy works on a diminishing sliding scale. The longer the policy is in effect the less the agent makes. Therefore, does it make sense that it is to the agent's benefit to move a customer's policy from 1 company to another?
A wrong assumption, and we do not move clients around willy-nilly in search of the best commission. We'l move the client to another company if situations warrant it- a new nav territory, unexpected increases in a renewal premium are common reasons.
Again, I find it distasteful that you assume such a negative viewpoint of an industry that pays out billions (yes, billions) in claims every year. For the record, most marine insurers see profitability as making less than $.10 on the dollar.
Insurance, one of those necessary evils.
No- insurance is a financial tool that can save your bacon.
